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New Homes: Will The Big Home Downsize?

Written by on Sunday, 18 June 2006 7:00 pm

As city planners, developers, builders, and Realtors look to the future of real estate, one question is on everyone's minds -- are homes getting too big?

Surprising no one, the U.S. Census department has found that new homes today are "substantially larger and packed with more amenities than their predecessors of 30 years ago."

"Between 1975 and 2005, the portion of new homes built with central air conditioning has risen 43 percent, while the portion of homes built with fewer than two bathrooms has fallen from 41 percent to just 4 percent," noted Jerry Howard, chief executive officer of the National Association of Home Builders (NAHB). "Meanwhile, the share of newly built homes with four or more bedrooms has risen steadily from 21 percent 30 years ago to just shy of 40 percent last year."

In 2005, the average floor area in a new 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. The Northeast had the largest average new-home size for any region last year, at 2,556 square feet. New homes in the Midwest had the smallest square footage, with an average of 2,310 square feet.

Due to high costs, the use of brick and wood exteriors has declined in favor of stucco and vinyl siding -- now the most-used wall exterior. Brick exteriors on newly built homes declined from 32 percent to 20 percent of the market between 1975 and 2005, while wood exteriors declined from 36 percent to 7 percent; the use of stucco as exterior wall material went from 10 percent of new homes in 1975 to 22 percent in 2005 and use of vinyl siding, which was previously not broken out in the Census data, went from 23 percent of homes in 1992 to 34 percent in 2005. Vinyl siding is particularly popular in the Northeast, where 83 percent of newly built homes last year had the material.

The Census data only reflects the exterior material that's on more than 50 percent of a home's surface area. Wood and brick are increasingly used as accents on the front of the home, rather than the whole exterior.

An important trend in home design that's been highlighted by NAHB builder surveys over the years is increasing ceiling height. More than half of all newly built single-family homes in 2004 -- 58 percent -- had nine-foot or higher ceilings on the first floor. This is up from an estimated 15 percent of homes with such features 30 years ago.

With burgeoning sizes, what does the counter-culture say?

Austin, Texas says enough. The Austin City Council passed rules effective October 1, 2006 limiting the height and size of new and remodeled homes in the central city area to either 2,300 square feet or a square footage equal to no more than 40 percent of the lot size. According to a report by Texas A & M's Real Estate Center, "attics, small attached garages and first-floor porches are not included in the square-foot calculations.

"Homes must sit at least 25 feet from the street with five-foot setbacks on the sides and ten feet in the back. Also, they cannot be taller than 32 feet, which is shorter than the current 35-foot height limit."

The reason? Residents have complained about "big houses that block sunlight, destroy trees and change the character of their neighborhoods. At the city council meeting, which lasted until 3:30 this morning, 226 people signed up to speak in favor of the restrictions, and 146 wanted to speak in protest."

One of the reasons people go for big homes when building is the bang for the buck for the extra space, but that can backfire as residents find themselves slaving to pay for bigger mortgages and utility costs.

However, there may be a counter revolution. Fewer than 48 percent of homebuyers have children under the age of 18 living at home. According to the Harvard Joint Center for Housing's "State of the Nation's Housing 2006," households look very different than they did 40 years ago. "With women gaining greater economic independence, divorce more acceptable, and couples delaying marriage, each generation has larger shares of single-person households, non-family households, and dual-earner married couples than the one before at comparable ages."

Without kids to house and entertain, homes don't need to be as large, particularly for singles, young families, empty nesters and retirees who don't want or need the financial burdens of operating a big home.

Affordability issues may also herald a return to the smaller home. Rising interest rates, an increase in lower-paying jobs, utility costs, and building and repair costs all favor the construction of smaller homes.

According to an article written for Parade Magazine in May, 2006, by Rory Evans, other local governments are putting moratoriums on home sizes, including DeKalb County, Georgia, Marin County, California, and Pitkin County, Colorado.

It could be a new wave of governments protecting resources when citizens refuse to. A new survey conducted by the Energy & Resources industry practice of Deloitte & Touche USA LLP recently found that, in spite of high energy prices, only one-third of consumers have made lifestyle changes to lower electricity consumption.

More worried about high gasoline prices (89 percent), yet only 2/3rds of respondents said they have made no lifestyle changes to decrease electricity use. Of those who did alter their behavior, the most common action was to adjust the thermostat, with only 20 percent conducting any actual energy efficiency improvements or purchasing energy efficient appliances.

Despite the reluctance to think small, the National Association of HomeBuilders predicts that the average new home in 2010 will be 2200 square feet, not the record-breaking 2,434 square feet of 2005.

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  About the author, Blanche Evans

Individual news stories are based upon the opinions of the writer and does not reflect the opinion of Realty Times.