From the REChannel:
According to new housing starts data from the U.S. Census Bureau, single-family homes in the U.S. continued to get smaller last year, and the downward trend is likely to last significantly beyond the end of the recession.
In a recent study by economists at the National Association of Home Builders (NAHB), from a peak of 2,268 square feet in 2006, the median size of new single-family homes dropped consistently through last year, when the size was down to an even 2,100 sf.
In the early 1980s, when mortgage interest rates climbed to astronomical heights, home sizes experienced a similar decline, but only temporarily. Today’s downsizing trend is likely to last longer, the report says.
“A new housing market is emerging, and even with the recession in the rear view mirror we expect the popularity of smaller homes to persist,” said Bob Jones, chairman of NAHB and a home builder from Bloomfield Hills, Mich. “Builders are responding to a new mindset among home buyers that has been shaped not just by a weak economy, and it is transforming the product they deliver.”
The current decline in home size can be attributed to factors like the desire to keep energy costs down, the amount of equity in existing homes available to be rolled over into new ones, tighter credit standards, less interest in buying a home as an investment and a growing presence of first-time buyers.
Characteristics of homes started in 2009 reveal a marketplace adapting to tougher economic times with fewer luxuries but also point to a few amenities that have been on the upswing despite the general retrenchment of consumers.
Looking at specific amenities, NAHB research found a steady decline in the number of homes started since 2005 with three-car garages, fireplaces, patios and decks. On the other hand, through last year porches were on the rise.
An examination of primary siding material found a noticeable swing away from stucco, which likely was the result of a 2005-2009 market share decline from 25% to 20% in the West, where stucco is most commonly used.
Overall, more than 35% of single-family homes started in 2009 had two-story foyers. This tends to be a luxury feature that is considerably more common in more expensive homes. Almost 60% of homes priced between $500,000 and $999,000 had two-story foyers; almost 71% of homes selling for $1 million or more had them.