At one time, the term “starter home” meant a modest house for a first-time buyer — a house with two or three bedrooms, maybe a garage, in an affordable area where a mortgage was cheaper than a rent payment. Today, it’s a bit more difficult to define what constitutes a starter.
“It’s not one thing or one price range anymore,” said Randal Lautzenheiser, managing broker of Atlanta Intown Real Estate Services. “I’ve sold first-time buyers $600,000 and million-dollar houses, which I certainly wouldn’t consider ‘starters.’”
The classic definition of a first-time buyer has changed as well. The once-traditional route — renting, saving for a downpayment, buying the first house — has been thwarted by Atlanta’s lack of sale houses, stricter mortgage guidelines and, for many younger buyers, student loan debt that often keeps them from qualifying for a loan.
But that doesn’t mean becoming a first-timer is out of the question. It is possible to find metro area homes in price ranges that make monthly payments comparable to rent.
“My definition of something ‘affordable’ is $200,000 to $250,000,” Lautzenheiser said. “Intown, you can find those prices on the west side around the Beltline: Reynoldstown, Benteen Park, the southside of Grant Park where there are 1940s houses with two bedrooms, one bath about 1,200 square feet. In this price range, houses aren’t always renovated and may need work. But you can still get a small one-bedroom condo in Midtown or Buckhead in the $200,000s at places like Park Central, Park View or Mayfair Renaissance. For a single professional, that may be all they want or need.”
Norman Bruce, an agent with Intown Realty, is a booster for Atlanta’s southside, including the neighboring towns of Hapeville, College Park and East Point.
“Capitol View Manor has houses by the same architect who did Morningside,” he said. “There are other good houses in Sylvan Hills, Adair Park and Capitol View. Because of the Beltline, areas like Pittsburgh and West End are changing quickly. And don’t forget that East Point has very quiet, established neighborhoods that are very diverse and still inside the Perimeter – and at the end of the MARTA line. I’ve sold homes here for $155,000, which is incredible. Intown, that same house would have been $300,000 to $400,000.”
Getting out of town often means prices are lower, and there’s a better chance of finding an affordable home buyers can customize from the ground up. Laura Watkins, president of Marketing Results, works with builders who offer new single-family and townhouses from the mid-$100,000s.
“Builders like Kerley Family Homes are seeing a lot of first-time homebuyers for several reasons,” she said. “They have single-family houses from the high $100,00s in swim and tennis neighborhoods all over the metro area. They also have people who can orient buyers on how a house is built and then get them connected to a preferred lender who can walk them through the whole process. And in a hot market, it also means buyers don’t have to get into a bidding war.”
Century Communities is another local company offering new homes priced around $250,000. Currently, it builds in 13 counties; its newest neighborhood is the 111-home Iris Brook in Covington, where prices start at $217,900. Houses have about 2,500 square feet, granite counters, four to five bedrooms and two- or three-car garages.
“On a $250,000 home, a buyer can pay $1,520 a month, including taxes and homeowners’ insurance,” said Susie Anderson, Century’s vice president of sales. “A lot of our homeowners are coming out of rentals and finding this comparable. It’s amazing how many opportunities there are like this if you look.”