Is the Next Big Thing Smaller Houses?

An excerpt from an NAHB article:

The median size of new single-family houses sold in the U.S. has increased 42% during the past 20 years — from 1,650 square feet in 1978 to 2,335 square feet in 2007.

But a closer look at the data shows that this trend has not held steady throughout from year to year. Decreases occurred in 1981-1982, 1995, 2003 and 2007-2008, and I expect house sizes to decrease even further this year and next while the economy remains sluggish. In addition, with the $8,000 first-time home buyer federal tax credit stimulus bringing more first-time home buyers to the market, the trend toward smaller houses will probably continue.

This trend toward smaller homes means builders will probably introducing products that are between 10% and 20% smaller than their current offerings.

Some of the ideas that are on the boards for this are: site plans that accommodate approved number of units on smaller lots with more land dedicated to open space. This also appeals to the modern homeowner who is looking for more walkable and diverse neighborhoods and green building practices. In fact, the smaller, smarter home can be considered a precursor to green building since, by definition, green homes require less material to build and less energy to heat and cool.

As for the house itself, many of the formal rooms are disappearing in houses that are smaller than 2,000 square feet and providing buyers with flexible options. In many of these houses, the dining room, if it is avialable at all, is often offered as a “dining or den” space, with doors as an option. For houses 2,200 square feet and larger, what in the past may have been the living room, parlor or other formal room now is often offered as a "den/guest bedroom" with a full bathroom nearby.

While formal rooms shrink in size, additional space is being added to great rooms and kitchen/breakfast areas — the rooms that home owners and families are using more. Also what used to be an upstairs bedroom is now often being turned into a loft or other form of flexible space. In addition, with these smaller houses, creativity has lead to new small amenities such as drop zone" desks near the kitchen, closets near the garage entrance and smaller "desk niches" tucked throughout the house.

Will house sizes continue to decrease once the housing market stabilizes? Demographics make a strong argument for the affirmative, since the average household size is continuing to shrink. Some predict that the trend toward smaller house sizes will continue through the coming decade, but that is less clear. For the near-term, however, expect house sizes to continue to shrink, until the economy and housing market recover.

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