A home-size bubble?
By Glenn Roberts Jr., Wednesday, June 11, 2008.Bookmarking Sites
Survey results released by the American Institute of Architects reveal a shrinking trend in home sizes, while government data shows homes are huge these days compared to historic sizes (see Inman News article), and the average size of new single-family homes completed in 2007 grew compared to the previous year.
The AIA reports: "As the housing market woes deepen, inflation affects the overall economy and utility costs continue to escalate, the size of the typical U.S. home is declining."
The health of the economy, energy costs and other factors can and do play into home-size decisions, say real estate professionals, though home size is not always a primary factor in a purchase.
Home sizes have been on the rise for decades now, though can we expect a home-size "bubble burst," or a decline in the size of new homes because of tightened lending practices and rising energy costs? And if house sizes do shrink, will it be temporary or longer term?
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Submitted by Michael Taylor on June 12, 2008 - 3:40am.
I don't think this is just a short term fad. Energy costs don't appear to show any signs of abating any time soon. Couple that with ka-gillions of baby boomers looking to downsize, and I think this is more of a long term trend.
Mike Taylor
Indianapolis real estate | Fishers Homes | Noblesville homes
Submitted by Jan McNulty on June 12, 2008 - 4:29pm.
There are several factors regarding home sizes.
For the moment, home sizes are decreasing do to high energy costs.
The trend towards larger houses has been created by the fact that on a fixed lot size, a larger house sells for a higher price and is more profitable to the builder because:
1. the price of the land is spread over a larger square footage of house
2. most of the infrastructure costs of a home are fixed whether that house is large or small
3. because the labor cost per square foot are lower for a larger house.
In my opinion, house sizes may trend lower for the near future, in the long term home sizes will increase because they are more profitable to those who build them.
Jan McNulty
Quartz Real Estate Appraisal
www.QuartzAppraisal.com
Submitted by Eric Bouler on June 12, 2008 - 6:54pm.
Eric Bouler
Prudential Gardner
New Orleans,La.
www.neworleanscondotrends.com
Families are smaller. Who needs all the junk people pile in their homes. Houses do not need to be as large. Local tastes are going to vary as to what people want. How many Al Gore's are there out there that would want to waste so much energy on large homes.
Submitted by Ki Gray on June 14, 2008 - 5:32pm.
I think you are right Eric. There are a lot of people that don't want or need large houses. We are dealing with many clients that want a 900-1300 square foot house. Income doesnt seem to be dictacting that either. They simply have no desire to maintain a 3000 square foot house.
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Submitted by Sam Chapman on June 16, 2008 - 6:19am.
With energy prices the way they are, smaller homes make sense. I also think that more green building techniques will be used, again because of heating and cooling costs.
Submitted by Wendy Polisi on June 18, 2008 - 11:28am.
Most baby boomers are ill prepared for retirement. This combined with rising energy costs will force many of them into smaller homes whether that is what they want or not. I agree that there is also a trend towards simplicity and that many people are chosing other priorities over a 4,000 sq ft home.
Submitted by Joe Cline on July 5, 2008 - 6:49pm.
Reasonable house sizes are so much nicer than the big square mcmansions. You can afford not only to own smaller houses, but you can outfit them with really cool gadgets, energy saving devices, luxury hardware, and do your own design to make the space your own. Measuring the home by square footage really stinks in most cases.
Joe Cline
Cardinal Hills Lakeway Listings | Highland Hills, Austin Texas
Submitted by Andreea Socolov on August 28, 2008 - 3:22am.
I think that after having such a hard time from choosing from lots of beautiful bridesmaid dresses, I don't know if I'd like to have such a home, with kids or co, you need a larger house.
Submitted by Glenn Ginsburg on October 17, 2008 - 5:47am.
I agree with you that there could be a change in the size of homes in the future as you point out, as well as other considerations - less travel time to employment - more established neighborhoods the land could be more expensive and therefore cause less investment in the residence. Another consideration is less people per household, equating to less need for square footage.
Glenn Ginsburg
A Delta Realty
Bonita Springs
Vasari Golf & Country Club
Submitted by Dan Connolly on October 21, 2008 - 9:06pm.
I think that home sizes have increased over the years and all that will change with the bursting of the housing bubble is that people who can buy, will have to pay less for the huge houses. The people who can't qualify still dream of large homes. It's the American way. It always amazes me when childless couples insist on 4000 square foot homes.
Atlanta Real Estate | Atlanta Foreclosures | Atlanta Real Estate Blog
Submitted by Spencer Mason on November 14, 2008 - 12:33pm.
I also believe the emphasis on smaller homes is a positive trend for the family unit. Instead of everyone being spread out in the house with several rooms separating any interaction, kids and parents convene in a central living area. It seems simply being in closer quarters encourages more face-to-face time (hopefully not to the point of annoyance) but enough to reinforce a healthy relationship among household members.
Chicago Condos
Submitted by Kim Gibbons on December 14, 2008 - 11:41am.
You know there could be an alternate explanation for the smaller home trend; boomers are down-sizing due to an empty nest. Boomers don't need a big home once all the kids have moved out.
Pensacola Florida Homes
Submitted by Kim Gibbons on December 14, 2008 - 11:54am.
You know there could be an alternate explanation for the smaller home trend; boomers are down-sizing due to an empty nest. Boomers don't need a big home once all the kids have moved out.
Pensacola Florida Homes