Cars.com has observed that consumers are dumping their SUVs in growing numbers. Will big homes be next? It's a good question as America posts a new record in home sizes.
According to Cars.com, large SUVs posted for sale by owner have risen dramatically over the last several years and now make up a larger portion of the total number of ads listed for sale by owner. Since March of this year, SUV postings have increased more than 14 percent and are up a whopping 40 percent from March 2003.
Also, as the number of SUVs for sale rises, the numbers of fuel-efficient models posted for sale are decreasing (23 percent since March 2003) and have decreased by as much as 6 percent this year.
Of interest is the fact that for sale by owners have increased on Cars.com in the Sell It Yourself listings.
High fuel cost has been the primary factor driving the spike in consumer postings of large SUVs over the past several years, suggests spokespersons for the site, and perhaps there's a similar change in consumer behavior coming to the housing industry.
Already, homebuying consumers are looking to lower their transaction costs like they have on Cars.com -- possibly because like SUV owners, many home buyers are upside down in their equity, owing so much that little is left over.
Homes are more expensive than ever before, costing more of the average borrower's income than ever before. One of the reasons is homes are larger. You get more, but you pay more.
Home sizes reached record highs in 2005, according to annual data on new home characteristics released recently by the U.S. Census Bureau . Living space, that is measured by the average floor area, in a 2005-built home was 2,434 square feet, up from 2,349 in 2004 and 1,645 in 1975. That's double the size of homes in the 1950s and in a current era when more households are forming, but the number of occupants is smaller due to the rising number of singles, couples without children, empty nesters and other non-traditional households.
According to the National Association of Realtors, less than 48 percent of homebuyers have children under the age of 18 living at home, about 25 percent of the U.S. population, suggesting that more families with children are likely to buy homes. However, non-traditional households are on the rise. For several years, single women have constituted nearly 20 percent of homebuyers.
As for central air conditioning, 100 percent of the homes built last year in the South had it, while nationwide, 89 percent had central air.
While the new home business is good currently, many expect sales to soften. Already, the median price of a new home has dropped to $235,000 nationally, which is down 4.3 percent from April and down 3.1 percent from May 2005.
"The latest results of NAHB's builder surveys indicate weaker demand for homes coinciding with higher interest rates, deepening affordability issues and a retreat of investors-speculators from the market," said National Association of Home Builders (NAHB) Chief Economist David Seiders. "We don't think the cooling process for housing is over yet, and we wouldn't be surprised to see a downward revision to May's numbers as well as some decline in coming months."
That could leave a lot of recent home buyers upside down in their homes.
