Houses Getting Smaller- Green Revolution or Tight Money?


the New American Home

Preston tells us that Consumers Now Want Smaller, More Efficient, Less Expensive Homes.

This is according to surveys by the National Association of Home Builders (NAHB) and Better Homes and Gardens Magazine. But I am not as optimistic about the results as Preston.According to the surveys, consumers today want:

* "Wii-sized," media-centric family gathering rooms
* More storage to keep clutter under control
* Small homes with built in shelves for food storage
* Energy-efficient heating and cooling systems
* Energy-efficient homes with lower utility bills
* Outdoor spaces, such as a front porch
* A dedicated home office space


Images from a wonderful slideshow on Levittown in the New York Times

I have not seen the actual surveys yet, but have read the linked articles and find some interesting tidbits:

Programatically, nothing has changed:

A home office proved to be another top priority, with 71 percent of all buyers saying a home office was "desirable" or "essential,"

52 percent said they want a home with four bedrooms or more.

Consumers in 2009 want...."Wii-sized" and media-centric family gathering rooms with enough floor space for playing the popular and physically interactive Nintendo video games.

Consumers also want more storage to keep clutter under control in these supposedly smaller homes, which could include anything from built-in shelving to a pantry that allows families to save money on groceries by stocking up on food staples.

Oh, and they are willing to pay more for energy savings.

-home buyers said they would pay an average of $6,000 more for their new home to save $1,000 annually on energy costs.

Really? Homebuyers have a fixed amount they can spend. There also probably isn't an upgrade on the market to a new house built to today's codes that costs only six grand and can be guaranteed to provide a 15% annual return on their investment. Since the amount that can be spent on a home is fixed, most will take a real extra 300 square feet over a purported but unproven saving of a thousand bucks. That is how it worked when gas was four bucks a gallon and that is how it works when it is a buck and a half.

In summary they want big family rooms, pantries and more closets, four bedrooms and a home office, all crammed into less but energy efficient space. As Brad Reagan of Smart Money says,

Of course, as the Big Three in Detroit can testify, Americans don't always put their money where their mouths are where greener and smaller are concerned.


Polly Dwyer, the president of the Levittown Historical Society, is standing in front of the last unchanged Levittown home, Damon Winter/The New York Times

Back in the day when I was starting out in the real estate development biz, I went to see a successful developer of homes and apartments for first time buyers and asked how he determined how big to build his units and what amenities he put in. Did he follow the trends? Read all the surveys?

No, he had a simple process that I will call "Alan's Law":

a) determine the average wage of the largest group of prospective buyers;
b) divide by 36 to get their maximum monthly mortgage payment;
c) given prevailing mortgage rates and construction costs, build the standard three bedroom, two and a half bath, family room and kitchen plan as big as you can. If rates are low, rooms get bigger; if money is tight build smaller. But never change the program.

Call me a jaded cynic, but I see the same suburban developer, customer, planning and product that there ever was; the only thing that has changed is that the money is tighter.

More on TreeHugger on House Size:
Monster Homes: Enough is Enough
Why Can't We Build an Affordable House?
Save Energy, Move in With a Friend
Quote of the Day: Monique Cole on Big Green Exurban Houses

Tags: Housing Industry | Less Is More | Living With Less