I recently won a bid and was able to upgrade from a Small plot in Empyreum to a Medium plot in Shirogane last week!
Honestly, I still believe that for any player who doesn't yet have a house, the first priority should be to secure any plot—even a Small one.
That mindset isn’t outdated at all.
With how competitive the housing system is, getting your foot in the door is the most important step.
Once you have a house, you gain access and from there, you can always try to upgrade later, just like I did.