Is The Average American Home Shrinking? For Now It Is
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The typical size of a home sold in the United States is 7 percent smaller according to the US Census Bureau. With a shrinking economy, tougher financing, higher energy costs, and the demographics of home buyers changing that all makes sense. But the important question to builders and home owners alike is, will it last?
My guess is that it will depend on the cost of energy. The rest of the cost of housing will remain pretty constant and housing prices have come down to the affordable range in most parts of the country again. But the cost of energy is a huge variable. Why have a huge home that costs as twice to heat and cool if you do not use it efficiently. That is a cost that will carry on far into the future if it continues to go up.
“Home size gains flatten out or decline during recessions, and we’re in the midst of the most serious housing recession in decades,” said Kermit Baker, the chief economist for the American Institute of Architects.
It’s also hard to know whether the trend is a the result of a change in attitudes or a change in buyers, according to Kira McCarron, the chief marketing officer for Toll Brothers, an upscale homebuilder.
The recession could have led to a temporary turndown in the number of young families buying homes, for example. But when they return to the market, they may drive up McMansion sale again. Meanwhile, older buyers are dominating sales.
“The active adult product is taking a bigger share of the market right now,” said McCarron, leading to more small homes and dragging the average new home-size data down. via CNN Money.
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Pingback by Afternoon Real Estate News: 8/12/09 « AccuriZ on 12 August 2009:
[...] Is The Average American Home Shrinking? [...]
Comment by KGSII on 12 August 2009:
One of the most notable trends during the recent housing boom was the rapid increase in square footage of new homes. The increase was an important factor in the variance of average to median sale price growing from 6% to 22%. Square Footage Matters! See the AccuirZ website under Real Estate Reports to read more.
Comment by M Realty on 12 August 2009:
The problem is that people think that bigger is better, when honestly you can live in a much smaller home and still be happy. Heck, try spending the money on a smaller BETTER home instead of a more expensive McMansion that was thrown together on tiny lot in a giant housing track.
-Tyler
Comment by Brandon Green on 12 August 2009:
Excellent news from a sustainability point.
Pingback by Daily summary of real estate news, Memphis comments, and other interesting stuff – August 12th, 8:10pm | Memphis Real Estate Buzz on 12 August 2009:
[...] Is The Average American Home Shrinking? For Now It Is : The Real Estate Bloggers The typical size of a home sold in the United States is 7 percent smaller according to the US [...]
Comment by Moshe Cohen on 13 August 2009:
Contributing to this trend is demographics
Comment by Gainesville Real Estate on 13 August 2009:
The new homes may be smaller, but people expect much more in terms of luxuries and features. Vaulted ceilings, granite counter tops, etc.
Comment by Real Estate Investment Software on 16 August 2009:
Considering today’s gas and utility prices, its no wonder people are leery of larger homes!
Comment by Esko Kiuru on 16 August 2009:
Due to this mortgage and real estate slump and the struggling economy, too, the average home size had to shrink to reflect market conditions. Hopefully we learn from this that we really don’t need all the extra space to live comfortably and productively. Cost of energy will play a role in the future direction of an average home size.
Comment by Meghan Porter on 21 August 2009:
Very interesting article. It’s hard to tell what exactly caused the reason for people buying smaller homes these days, but for whatever specific reason, the recession probably also played a major part. Perhaps, like you said, after this economic downturn the McMansion will become popular again like it was not that long ago. Have you considered creating a http://bit.ly/4bybHr poll for your readers? I find them pretty useful and also fun for voting!