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KB Homes is shifting it’s strategy by reducing the size of the homes it is selling. While this is not a revolutionary idea, it is different from what we hear from other builders. Most of the builders in the market are claiming that once a development is started they have to press onward with the plan. They would prefer the glut of inventory on the market than to stall projects that have started.

However, KB Home’s approach is refreshing and good business. They are reducing the size of homes they are building which is attracting a bigger base of potential buyers. With higher energy costs expected to stay with us through the long haul having a smaller energy efficient home is a good bet for buyers and sellers alike.

KB Home differs from many other homebuilders because it doesn’t build a house until it has a buyer under contract. Other companies complete construction, then seek buyers. KB Home embarked on its smaller, cheaper strategy about nine months ago, with its first planned communities reflecting the change late last year.
The company declined to disclose national figures on how the smaller homes were selling. But KB said it sold 48 units in the past eight weeks at a Las Vegas community where homes range from 1,267 square feet to 1,608 square feet, and prices start at $195,590.
The homes are as much as 500 square feet smaller than homes buyers might have preferred a year ago, Mezger said. Prices vary, but the smaller homes are as much as 20 percent cheaper than larger versions. Buyers can still opt to add a bevy of amenities, which can drive up the final price.via the OC Register

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