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.
Yea OK whatever,
I say that when the good times roll again the mc-mansion will be back with a vengeance.
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In the absence of easy access to bigger mortgages than they can pay for, the average new home buyer will probably never be able to afford to build a new McMansion again. But there’s a huge supply of pre-owned ones available.
We tend to look at the future in the same way we remember the past.
In traditional societies, that view held true. But it has never been the case in our country. I often remind my students that this country has changed, often significantly, every decade since our declaration of independence (1776). Every single decade.
Just about everything about us changes and this housing debacle will be no different. Those anticipating a return to something resembling 1990 to 2005 are in for a very long wait. I’d say past our lifetimes.
5 years from now, the good, smart, tough realtors like Jim will be around. Most of the rest of the industry and those who sell in it will not survive the coming years.
Your children’s future will not be the one we’ve had; and that is firmly in line with the American experience.
I am all for a smaller and better designed house.
We don’t need a lot crazy technological gadget that claim to save energy as those things goes out of style and look dated like last week iphone.
All the invisible things hidden behind walls and floor like structure, plumbings, waterproofing and electrical are really important if you are a rational and value buyers. But most people still buy with emotion and that is one reason we are in this mess.
Abstinence and moderation are not American strong points (well at least not in Socal).
I don’t think it’s a question of abstinence or moderation, or returning to any past trend. Once people feel comfortable buying homes again, they’ll still buy as much home as they can afford and they’ll still wish they could afford McMansions. They just won’t be able to.
Abstinence and moderation is being forced on some who can’t afford it anymore, and others have been spooked into living with less extravagance.
This is where the ‘haves’ gain control – they can afford to blow out all other buyers because they can.
McMansions will never go out of style in places like Carmel Valley – that’s all you have there. If you want to buy in CV, you better want a newer tract house on smaller lot. Or spend more than $1,500,000.
Since when do builders actually build what people prefer to buy? When I would shop a lot of the big Sacramento housing developments during the boom, the smaller models were always the first to sell out. Builder prefer to sell large homes because the margins are higher, not because buyers perfer them.
Really well designed and detailed buildings will be engaging 50 to 100 years after they were build. The rest are just Taco Bell and Olive Garden-Variety style architecture. Tasty and yummy even when you are not hungry.
Must be lunch hours. 🙂
“Abstinence and moderation is being forced on some who can’t afford it anymore, and others have been spooked into living with less extravagance.”
Abstinence and moderation are, by definition, choices. If you aren’t choosing to live with less than you could have but simply can’t afford more, you aren’t abstaining or moderating, you’re living at your limits and those limits are depriving you of what you want but can’t have.
Though somehow I think people who are “forced” to buy smaller homes they can actually afford are going to have a tough time selling the argument that they’re “deprived.” 🙂
wives will never downsize……
aperian, 😀
Dude, where in the world would we cram all of my hubby’s stuff? It’s the packrat in the family that determines the best house size for that family.
I wish more builders would build one story homes to accomodate the aging population. Even the small homes (1600-1800 sq ft) are often two story to maximize builder revenue per acre. Due to knee issues as I age, I’ve been actively searching for a one story in Carmel Valley and they are almost impossible to find. The number of stories are even more important to me than square footage.
“Dude, where in the world would we cram all of my hubby’s stuff? It’s the packrat in the family that determines the best house size for that family”
-I second that emotion.
“The number of stories are even more important to me than square footage.”
When we moved to San Diego we immediately excluded any home from consideration any home that had more any more level changes than a one or two step sunken living room. Reduced the amount of time we had to allocate to touring homes considerably.
“It’s the packrat in the family that determines the best house size for that family”
Any bachelor will confirm that boxes of saved magazines and hobby stuff don’t take up that much room in a house; you just put them in the garage with the motorcycle and park your car in the driveway. It’s all that furniture you have to buy after you get married because the cinder blocks and floor cushions become unacceptable that really fills up a house. 🙂