Th e trend is smaller and more efficient. Cars, trucks,
computers, cell phones, and now it appears real estate has joined the party.
New homes are shrinking for the first time in 15 years. According to the Census Bureau the average new home is 2,065 sq. ft., a 7% decline from a year ago.
The question is, is this a function of changing consumer interests or a result of the downturn in the economy? I would say it is a little of both.
From a real estate perspective, builders have to adjust to the market and what is selling. Right now smaller entry level and investor friendly properties are selling. Tax credits and low interest rates have boosted this segment of the market. On the flip side, higher end home sales are really struggling. “Jumbo” loans for higher end homes are more expensive and harder to get. The higher the prices get, the fewer people will be able to afford them.
From the consumer perspective, people are adjusting to the
new realties of our economy. Let’s face it, gas prices are going back up. Most
of the newer developments in town are in suburban areas. Spanish Springs, Cold
Springs, Stead,
So will this trend continue? I say yes. People don’t want to be “married” to their house. They are cutting back on living expenses to free up cash for other things. Eating out, sporting events, college funds, and vacations.
What do you think?
I agree with your assessment. I was listening to a guest speaker who was a futurist and he was talking about the same subject. He was making comparisons to the early 70’s. The average square feet was approx 800, now it is over 2000. Everybody wants more and more. How much is enough? thanks
Posted by: Craig Ballhagen | August 18, 2009 at 09:51 AM