subject: Size Isn't Everything…Smaller Houses Make a Comeback [print this page] Size Isn't EverythingSmaller Houses Make a Comeback
It seems the recent recession has changed the tastes of American homebuyers. During the housing boom, big was better; with home theatres, butler pantries, and bathrooms for each resident, home sizes kept growing and growing to the point where a 3500 square foot home seemed the norm. Now, home buyers that are feeling the economic squeeze are leaning towards more modest dwellings.
The NAHB (National Association of Home Builders) reports that in the last 3 years the average size of a new home has shrunk 300 square feet ; that's like removing 2 rooms. Builders are indicating that 9 foot ceilings, which create a greater sense of space, are being placed higher on the list of must-haves above media rooms and additional family rooms. The amount of bathrooms has been reduced for the first time since 1992 with new homes with 3 or more declining from 28% to 24%. Bedroom numbers have also dropped in new home starts, as the number of homes with 4 or more has fallen from 40% to 32%.
Although a similar trend arose from the ashes of the recession we experienced in the 80's, it is anticipated that this recent shrinking in home sizes will last much longer. David Crowe, Chief Economist with the NAHB suggests, "The decline in the early 1980s turned out to be temporary, but this time the decline is related to phenomena such as an increased share of first-time home buyers, a desire to keep energy costs down, smaller amounts of equity in existing homes to roll into the next home, tighter credit standards and less focus on the investment component of buying a home". Crowe further states, "The repeat buyer is going to be more careful about what they buy, too...Any buyer is going to look at this recent experience in the market and realize house price inflation is not always positive".
Other factors contributing to this trend include average household size which, according to the Census Bureau has dropped from 3.5 children in 1960 to 2.1 in 2006. An aging overall population is also a factor as retiring baby boomers are seeking homes that are easy to maintain and have no stairs. The migration of households from suburban to urban areas, where lots are smaller, is also responsible for the downsizing mindset.
The economic storm we are experiencing has created a climate where less is more. Consumerism is down as people begin to realize the difference between wants and needs and the requirements of a comfortable home have changed as a result.
