The McMansion Era May Be Ending
WASHINGTON, DC — For the first time in at least ten years, the average size of new homes sold in the U.S. is shrinking. In the fourth quarter of 2008, the average new home measured 2,342 square feet — significantly less than in the second quarter of 2008, when new homes averaged 2,629 square feet.
Reporting on the trend, USA Today interviewed Gopal Ahluwalia, vice president of research for the National Association of Home Builders. “This will remain a trend. I don’t expect this (home size) to come back up,” said Ahluwalia. “We don’t need big homes. Family size has been declining for the past 35 years.” According to an NAHB survey, 9 out of 10 builders say they’re planning to build smaller, lower-priced homes than in the past.
A Novel Idea: A Home Is A Place To Live
USA Today also quoted Kermit Baker, chief economist of the American Institute of Architects, who said that plummeting home values “have caused many people to stop seeing houses as an investment but rather as a place to live.”
Recognizing the trend, home builder KB Home is selling tiny new 880-square-foot homes in three Houston subdivisions for $64,000. According to BusinessWeek.com, “If the houses sell, KB will build them in other cities, targeting renters in all markets. The houses will yield higher-than-usual margins, KB says, because they have [fiber-cement] siding instead of brick and Formica countertops rather than stone. Bathrooms are lined up vertically to save copper pipe. … KB chief Jeffrey Mezger says the mini-houses are a return to his industry’s roots in post-World War II communities such as Levittown, N.Y., where 800 square feet was a typical home size. ‘Any time there’s been an age of exuberance and then the economy turns,’ he says, ‘people get back to “What do I need?” rather than “What could I buy?” ’ ”
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