Blanche Evans is a writer/editor and CEO of evansEmedia. Formerly, she was a senior editor with Realty Times, where she was named by REALTOR® Magazine as one of the most influential people in the real estate industry.
Will Big Homes Keep Getting Bigger?
Data from the U.S. Census Bureau shows home sizes are still growing. But with changing lifestyles and demographic shifts, this trend may soon retract.
June 1, 2007
Despite rising energy prices and smaller households, homes keep getting bigger, according to government data. It seems big homes are still a key symbol of prosperity, a sign for many people that they’ve achieved the American dream.
The percentage of occupied homes with four or more bedrooms grew to 20 percent in 2005 from 17.7 percent in 2000, according to the U.S. Census Bureau’s American Community Survey.
However, a look at other data — including demographic shifts and lifestyle trends — suggests that homes won’t continue their growth spurt. In fact, a reversal may present itself in the very near future.
My, How They’ve Grown
Here’s a look at the expansion of homes over the past several decades:
- More square footage. In 2005, the average floor area in a newly built home reached an all-time high of 2,434 square feet, up from an average 2,349 square feet in 2004 and just 1,645 square feet in 1975.
- Homes get taller. In 1973, two-thirds of new homes were one-story. By the 1980s, home sizes had risen nearly 25 percent, despite the high energy costs of running a larger home. In 2006, the majority of homes were two-story to accommodate larger floor plans on smaller lot sizes.
- Sprawl takes hold. Home buyers took advantage of soft energy prices throughout the late 1980s and the 1990s by building bigger, higher volume homes. At the same time, neighborhoods sprawled from urban centers to more spacious suburbs and low interest rates put the big homes in reach for a wider swatch of consumers.
- Luxury becomes necessity. Media rooms, home offices, spa baths, and other specialty spaces that once were a luxury became must-haves for consumers in big homes.
Is Small the New Big?
There are plenty of signs that massive homes are starting to lose favor to smaller abodes. Here are some factors that likely will contribute to smaller homes in the coming years:
- Small is more affordable. Median home values have jumped about 40 percent to about $167,500 between 1990 and 2005, which means big homes may be getting too expensive for many home buyers.
- Baby boomers downsize. Baby boomers, the largest U.S. population segment at 78 million in 2005, began turning 60 in 2006. As they become empty nesters, many opt to downsize from their family homes into smaller houses or condos that are easier to maintain.
- Construction, upkeep gets pricey. The cost of land and materials is growing, as are the costs to heat and cool a home. These economic factors may cause many home buyers to think twice about buying a home larger than what they really need.
- Surrender the commute. Rising gas prices and growing traffic problems from suburbs — where the majority of larger homes are being built — may cause some home buyers to rethink the tradeoff between owning a big house and a long commute.
How Homes Will Change
The National Association of Home Builders already is reporting that home sizes are beginning to moderate. In fact, in its 2010 projection, the group anticipates that home sizes won't be any larger than they are now. Instead of size, home buyers will demand more flexible floorplans so interiors can be configured to suit individual needs.
The American Institute of Architects Home Design Trends Survey also suggests a counter trend of moderation, primarily due to affordability issues and energy costs.
In 2007 fewer home owners wanted increases in square footage and volume, while more home owners wanted single-story floor plans, the AIA survey says. Because of the cost of "footprints" or foundations and land, single-story homes built in the future will be smaller than two-story homes are now.
(c) Copyright 2007p Realty Times. Reprinted with permission.