Survey reveals downsizing trend for homes, Census data, though, shows home sizes growing
By Inman News, Wednesday, June 11, 2008.
Let the home-size debate begin.
According to a survey of home-design trends, the era of super-sized homes is giving way to downsizing — the American Institute of Architects suggests this is a possible byproduct of the housing-market downturn, weakened economy and changing demographics.
But the latest government data on housing characteristics does not support the survey findings, as the average square footage of homes remains historically high. The Census Bureau reported in its Characteristics of New Housing report for 2007, released this month, that the average new single-family home completed had 2,521 square feet, up 2.1 percent from 2,469 square feet in 2006.
And the average square footage of new homes completed has grown about 46.6 percent since 1977, when the average was 1,720 square feet.
About 26 percent of all new single-family homes completed in 2007 had 3,000 or more square feet of space, the Census Bureau reported, up from 24 percent in 2006 and 11 percent in 1988.
And the percentage of new single-family homes completed with 1,200 square feet or less of floor area shrank from 25 percent in 1973 to 4 percent in 2004, holding steady through 2007. Likewise, the percent of homes ranging from 1,200 square feet to 1,599 square feet has shrunk from 31 percent in 1973 to 14 percent in 2006 and 2007.
In the latest AIA Home Design Trends Survey, released this week, respondents were more than twice as likely to report a decline in home sizes than a rise in home sizes (33.5 percent vs. 15.5 percent).
By comparison, the group’s 2006 survey found that participants were more than twice as likely to report gains in home sizes than shrinking home sizes.
About 28 percent of respondents said the total volume of homes is increasing vs. 12 percent who reported that home volume is in decline, compared with 51 percent who reported volume increases in the 2005 survey.
Troy Richardson, a Realtor for Maple Leaf Realty in Bennington, Vt., said that smaller homes “are definitely selling faster than larger homes,” and “this has been the case for awhile” in that market area.
“Larger homes are viewed as burdensome to buyers for many reasons,” he said. “In the Northeast, everyone wants to know heating costs, and know how many gallons of fuel the home used.”
In the long term, Richardson said he believes that homes will be built smaller so that they are more energy efficient and manageable for buyers.
“Smaller homes will continue to be seen as good investments because of the lower maintenance costs, and the lower heating and cooling costs,” he said.
Economic conditions definitely play into house-size decisions, he also said, and an uncertain job market “makes buyers less willing to stretch themselves. Buyers are much more realistic now about the amount of house they can afford, maintain and more importantly — heat.”
In Danville, Calif., a community known for its luxury homes, buyers are leaning toward mid-sized homes, said Tracy Pisenti, a Realtor for Empire Realty Associates.
“Two years ago, the trend was more toward five-plus bedrooms, 3,000 square feet — and a much larger number of two-story homes purchased,” she said.
“I think the trend away from the larger, two-story homes is based on two primary factors: economics and age of population. Single-story homes are typically less expensive to heat and cool, and as many buyers in my area are reaching their 40s they are looking longer-term at wanting a single-story home to stay in as they age.”
Real estate market conditions and the economy do have a bearing on house-size decisions, she said, as these factors relate to the size of a home that families can ultimately afford. Also, many of the homes that were most impacted by the credit crisis and real estate market correction are smaller homes, she said, and smaller homes are now popular with first-time buyers for affordability reasons, and for investors who are purchasing bank-owned foreclosure properties and short-sale properties.
Mary Pope-Handy, a Realtor for Keller Williams in California’s Silicon Valley, said she hasn’t seen much change in house-size preference among buyers in her area.
“There’s really not enough of a selection that people have the luxury to be more picky about size. It really seems the same to me over the years: People care more about location than size, in my opinion.”
Condition also seems to be a higher priority for buyers than home or lot size, she added.
Ron Welnetz, a Realtor in Antigo, Wis., said home sizes have held fairly steady in that community, and new construction is typically in the 2,000-square-foot to 2,500-square-footage range.
Bennington, VT, Buying, Market Outlook