Coeur d’Alene, Idaho, is experiencing a notable rise in the construction of starter homes, a shift welcomed by young families and first-time buyers. Developers are now focusing on homes that range from 1,200 to 1,400 square feet, with a median price of around $429,000, marking a significant shift from the larger and more expensive properties that have dominated the market in recent years.
This strategic focus is not just helping ease the housing crunch but is also making homeownership more accessible to a younger demographic. According to Zillow’s latest housing market data, the demand for affordable and smaller homes has spiked across suburban markets like Coeur d’Alene.
Homebuilders are adjusting to the evolving needs of the market. A mix of high mortgage rates and inflation has made it difficult for new buyers to afford traditional family-sized homes. As a result, the demand for compact, affordable housing has become more apparent than ever.
Local developer Mike Lang of Lakeview Properties commented, “Buyers are now looking for function over square footage. A well-designed 1,200-square-foot home can offer everything a young family or working professional needs without stretching their budget.”
This market behavior reflects a national trend toward “missing middle” housing—homes that sit between multi-unit apartments and large single-family homes. These include duplexes, townhomes, and small single-family residences.
The average starter home in Coeur d’Alene now costs about $429,000, a price point that is still high by historical standards but far more attainable compared to the city’s median home price of nearly $600,000 just two years ago, as reported by the National Association of Realtors.
While $429,000 may not sound cheap, it falls within the budget for many first-time buyers who qualify for FHA loans or low down payment options. In a housing market plagued by supply shortages, this development is a step toward balancing the equation.
Most of the demand is coming from millennials and young professionals relocating from larger cities in the Pacific Northwest. Many are drawn to Coeur d’Alene for its quality of life, recreational opportunities, and relatively lower cost of living.
“People are moving here from Seattle, Portland, and even California,” said local realtor Jessica Myers. “They’re cashing out of high-cost markets and looking for something affordable, modern, and close to nature.”
According to a recent Redfin migration report, Coeur d’Alene ranked among the top U.S. cities for inbound migration from higher-cost states, adding pressure to local housing inventory and raising the need for affordable options.
Even though the square footage has shrunk, homebuilders are ensuring that modern amenities are not sacrificed. Many of these starter homes come with open-plan kitchens, energy-efficient appliances, smart home features, and small but functional yards.
Samantha Greeley, a first-time homeowner who recently purchased a 1,350-square-foot home in the new Clearwater Springs development, said, “The home may be small, but it has everything we need—and more. We’ve got a smart thermostat, solar-ready roofing, and a two-car garage.”
Designs are also being optimized to feel spacious and practical. “By using vaulted ceilings, natural lighting, and multi-use rooms, we’re creating homes that live larger than their footprint,” said architect Devon Harper.
The shift toward starter homes is also pushing Coeur d’Alene city planners to think differently about infrastructure and zoning. Officials are encouraging higher-density housing projects within city limits to prevent urban sprawl and protect natural surroundings.
The City of Coeur d’Alene Planning Department recently proposed updates to zoning laws to support “cottage-style” housing clusters and accessory dwelling units (ADUs), which are small living units built on existing residential lots.
These changes are aimed at keeping the character of the city intact while accommodating its growing population. Schools, parks, and public transportation are also being reevaluated to meet the needs of new families and working residents.
The focus on new construction is also revitalizing the local economy. The rise in development has created more jobs in construction, real estate, and retail sectors. Local businesses like hardware stores, interior designers, and home improvement services are seeing a surge in demand.
In addition, the local government is benefiting from increased property tax revenues, which can be reinvested into community projects, road improvements, and public services.
Experts believe the starter home trend is here to stay, especially in secondary cities like Coeur d’Alene, where lifestyle appeal is high and the cost of living is more manageable than in major metropolitan areas.
However, there are concerns about how sustainable the current pace of development is. Environmental groups have warned against overbuilding and urged for responsible planning that considers wildlife, water resources, and green spaces.
Still, the consensus remains optimistic. As long as developers, city planners, and the community continue to collaborate, Coeur d’Alene could become a model for other growing towns trying to address housing affordability without compromising livability.
Coeur d’Alene’s shift toward affordable, efficient housing is a promising step toward solving the broader housing crisis. With thoughtfully designed starter homes now on the rise, the city is offering a realistic path to homeownership for a new generation of buyers.
If you’re considering making a move, now may be the right time to explore what Coeur d’Alene real estate has to offer.
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