I live in Honolulu, so VHCOL. I have two kids.
Started our marriage in a rented 2 bedroom, 800 SF upstairs apartment. Got knocked up three months into marriage, had the baby, and within six months we just couldn't stand that apartment anymore--not because it was too small, but because it was horribly hot and the location wasn't working for us anymore.
Moved out into another two bedroom, one bath rental--a 650 sf cottage with a backyard. Great location in some ways, and the space was adequate especially because of the backyard, which was great for our baby who was learning to crawl and toddle around. But it was still pretty cramped and the kitchen had no counter space.
We bought our first condo in 2015 for $364k (+$550/month fees, have gone up 3% a year since then), a 3 bedroom 2 bath 844 sf unit in a highrise building. We knew we wanted at least one more kiddo, so we knew a three bedroom was going to be necessary. Also knew we had to have laundry in the unit, a dishwasher, and 2 parking.
Had our second baby and decided we were done with having kids. Thus began our six year love/hate relationship with the 844 sf condo. No extra storage. No garage. Two car, tandem parking stall. It was exactly as much space as was absolutely necessary and no more.
I am really, really good at decluttering. I don't buy anything without thinking through whether we have space to store it. We wound up with a minivan because we used it as a garage to store the kids' bikes and some outside gear. We spent most of our time outside, which is do-able in Hawaii. The building had a pool, which helped a lot.
Mostly, we made it work. We had ingenious storage solutions. We saved money because there were lots of things we just couldn't buy. The neighborhood was very walkable and safe, and the commute was 15 minutes for me and 5 minutes for my husband. The kids were little and didn't need much.
The pandemic lockdown was pretty brutal on us, though. There was no space to get away from the kids and work. We finally saved up enough to move into a 1400 sf townhome, which we just bought for $730k (+$1k/month fees, slated to rise 1% annually) in January 2022.
It has been amazing to have so much more space. 1400 square feet feels incredibly luxurious. Our kids are now 7 and 5 and it's really, really nice to be able to just send them outside to play--our new neighborhood is much more amenable to that than the high rise building was.
From a purely financial standpoint, I wish we lived in a place where real estate weren't so expensive, where we could have afforded a 1500 sf 4 bedroom 2 bath home right when we got married, and just stayed put the whole time, through the kids' being born and growing up. But we had to go the starter home/trade-up route. Buying that small condo turned out to have been a pretty good move, financially. It appreciated $110k in six years, and we paid down quite a bit of the mortgage in that time because of the low interest rate. It made it possible for us to upgrade.
In VHCOL areas, getting your foot in the door with housing that only hits your bare minimum needs is a good idea, in my opinion. The NYT rent vs buy calculator always put us way, way ahead in the "buy" category as opposed to the "rent" category. But we were willing to suffer through many years in quite a small living space. We made it work. Relatives who came to visit stayed in AirBnBs, and we mostly travel to see them in their areas so that things are less costly. We HAVE hosted relatives in the small condo, but it was a tight squeeze, as you can imagine. We aren't super close to our families, so only seeing them once or twice a year works for us.
