By Jennifer Jordan | Charleston Housing News

For years, the idea of a “starter home” costing $1 million sounded like something reserved for San Francisco, Manhattan, or a handful of elite coastal enclaves. Today, that reality is spreading across America.

According to a new Zillow analysis, there are now 242 U.S. cities where the typical starter home is valued at $1 million or more. That’s triple the number recorded in 2020 and a striking example of how dramatically housing affordability has shifted in just a few years.

Zillow defines a starter home as a property in the bottom third of local home values. In other words, these aren’t luxury estates or waterfront mansions. They represent the entry point into homeownership in some markets.

While California still dominates the list with 105 cities, million-dollar starter homes are now appearing across 26 states, including South Carolina.

The trend may sound surprising, but Charleston-area buyers have already been experiencing the effects firsthand.

Mount Pleasant Offers a Local Example

While Mount Pleasant has not yet reached the point where typical starter homes cost $1 million, the community illustrates how quickly affordability has changed.

Today, the median sales price in Mount Pleasant hovers around the upper-$700,000 range to low-$800,000 range depending on the month and property mix. Just a decade ago, many buyers could comfortably enter the market well below $400,000.

As prices have climbed, many neighborhoods once considered attainable for first-time buyers have become increasingly difficult to access without significant household income, equity from another property sale, or family assistance.

For younger professionals and growing families, the challenge isn’t necessarily finding a home. It’s finding one that fits both their needs and their budget.

Charleston’s Housing Math Has Changed

Nationally, Redfin estimates households now need roughly $117,000 in annual income to afford the typical home purchase. In many Charleston-area communities, the required income is substantially higher.

A buyer purchasing an $800,000 home with today’s mortgage rates can easily face monthly housing costs that would have seemed unimaginable just a few years ago.

The result is a growing divide between longtime homeowners who have benefited from years of appreciation and first-time buyers attempting to enter the market for the first time.

Why Charleston Isn’t California

The good news is that Charleston differs from many of the nation’s most supply-constrained housing markets.

Unlike much of the Northeast and parts of California, the Charleston region continues to add housing inventory through new construction in areas such as Summerville, Nexton, Cane Bay, Moncks Corner, and portions of Berkeley County.

That additional supply has helped moderate price growth compared to some coastal markets where development opportunities are extremely limited.

In fact, Charleston’s active inventory has risen substantially over the past year, giving buyers more choices and reducing some of the intense competition seen during the pandemic housing boom.

The New Definition of Affordable

Perhaps the biggest takeaway from Zillow’s report isn’t that starter homes are reaching $1 million in more cities.

It’s that the definition of affordability has fundamentally changed.

For many Americans, including buyers in the Charleston region, the challenge is no longer simply saving for a down payment. It’s earning enough income to comfortably qualify for a home in the communities where they want to live.

As inventory continues to improve locally, buyers may find more opportunities than they had during the frenzy of 2021 and 2022. But affordability remains one of the biggest issues facing the housing market.

The era of the $1 million starter home may not have fully arrived in Charleston yet. However, for many buyers shopping in desirable communities such as Mount Pleasant, Isle of Palms, Sullivan’s Island, and parts of downtown Charleston, it no longer feels as far away as it once did.