They explore why starter homes are vanishing, focusing on builders shrinking floor plans as costs rise. The role of zoning, HOAs and lot economics in keeping sizes up is examined. Discussion covers ADUs, house-hacking, and where smaller new builds are being placed. They compare condos, townhomes, and build-to-rent as affordability solutions and why two-bed, two-bath units dominate investor demand.
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insights INSIGHT
Higher Prices Lead To Smaller Homes
When prices rise, builders respond by shrinking home sizes to preserve affordability and margins.
Ken McElroy notes historic patterns where developers cut square footage instead of stopping construction.
volunteer_activism ADVICE
Cut Size To Save Costs
Developers can trim construction costs by reducing square footage to protect margins.
Builders aim to deliver more affordable units by carving out costs rather than halting projects.
insights INSIGHT
Zoning And HOAs Constrain Size
Lot and HOA rules often limit how small a home can be in established neighborhoods.
Zoning and neighborhood conformity remain key constraints on shrinking homes.
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Starter homes are vanishing, and it’s not because builders don’t want to help first-time buyers. Ken and Danille McElroy break down the real math behind shrinking home sizes, rising land costs, ADUs, build-to-rent communities, and what this shift means for buyers and investors right now.
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ABOUT KEN: Ken is the author of the bestselling books The ABC’s of Real Estate Investing, The Advanced Guide to Real Estate Investing, and The ABC’s of Property Management. With over two decades of experience in real estate investing, Ken McElroy is passionate about sharing the good life by helping real estate investors grow and prosper. This podcast is a place for Ken to discuss numerous topics connected to real estate investing, including finance, budgeting, the entrepreneur mindset, and creating passive income. Ken offers a wealth of personal experiences, practical advice, success stories, and even some informative setbacks, all presented here to educate and inspire. Whether you’re a new or seasoned investor, the information and resources on this channel will set you on a path where you and your investments can thrive.
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