Survey Reports Smaller Homes Is On the Rise, Really?

Ah, I just came across this: Home Sizes Shrink with Growing Concerns over the Economy and Energy Costs. There is also a press release released by American Institute of Architects.

From the Press Release:

“The recent weakness in the housing market forces households to be more sensitive to housing affordability concerns. Coupled with rising home energy costs, this encourages many to rethink their overall space needs,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “While smaller homes may be a short-term response to economic conditions, there are signs that we may be at the beginning of a longer cycle where house sizes stabilize or even decline.”

Baker continued, “With weak billings, inquiries for new projects and project backlogs, evidence suggests that the conditions in the residential market are not poised to improve anytime soon.”

Inman news disagrees. “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 single-family home completed had 2,521 square feet, up 2.1 percent from 2,469 square feet in 2006.”Inman also quotes our very own local agent “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.’”

As someone who works in both real estate and design industries, I see both parties’ points. Buyers today focus more on buying “lifestyles” and trends. The “zen living” and being environmentally friendly and conscious style has becoming increasing popular in a short period of time. Being eco-friendly and sustainable also has become a big market for businesses from all sectors to tap into. Just look at how yoga industry has evolved from new age bull crap into a billion dollar industry that hold large industry conferences with thousands of bamboo fabric wearing yogis attending in troves several times a year.

Affordability also has gone decreased. Being a millionare does not carry the same weight as 20 years ago comparing to now. Our living costs have increased drastically. My uncle still talks about how gas used to be a quarter and a movie ticket cost a dime. Now gas is fast approaching $5/gallon and tickets are around $11 or more. In the last 10 years, the gas price has gone from $1 something to almost $5. That’s a very fast increase. YIKES.

As a real estate professional working in the residential resale, I see that ultimately location and price are the leading factors in resales. Of course buyers always want the biggest bang for their buck. It’s plain and simple. They want to know how they can buy most amenities and perks with the least amount of money possible. From a design professional point of view, I do see that there is an increasing trend in new homes to be smaller and more accessible to accommodate the aging populations. It’s also easier to maintain and cheaper to live in. Additionally, there are simply too many people too little space. We are running out of spaces to build.

As a perspective/former buyer or seller, what are your 2 cents?

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