- The Washington Times - Friday, November 28, 2008

When architect Sarah Susanka wrote “The Not So Big House” in 1998, she could not have anticipated either the rush of complementary sentiments by some consumers or the equally strong drive among others to build and buy increasingly larger homes.

The average size of newly built homes has steadily increased from just over 1,600 square feet in the late 1970s to nearly 2,300 square feet today, according to the National Association of Home Builders (NAHB). However, recent surveys indicate that home-size trends may be shifting.

In a February 2008 NAHB survey of potential home buyers, 60 percent of those responding said they would rather have a smaller house with more amenities than the other way around.

The American Institute of Architects (AIA) surveys 500 residential architectural firms quarterly for their Home Design Trend Survey. In the first quarter of 2008, survey results indicated that home sizes are declining.

Kermit Baker, chief economist for the AIA, says, “Every year, beginning about three or four years ago, a smaller and smaller number of those surveyed say homes are getting larger. A larger and larger number say that homes are getting smaller.”

Just 16 percent of respondents in early 2008 claimed that homes are still increasing in size, compared with 32 percent in 2006. Local builders Beazer Homes Corp. and Airston Group Inc. have recently introduced smaller, single-family home models in the Washington metropolitan area.

The reasons for the shrinking size of homes are varied, but a key element seems to be affordability.

“When you make a home smaller, you are cutting costs for the builder, which helps, in turn, make the home more affordable for buyers,” says Deborah L. Rosenstein, vice president of Christopher Cos., a local builder. “Affordability is the key right now for everyone. People realize that they may not really need 3,200 square feet, that 2,500 to 2,700 (square feet) is just fine, as long as the finishes are what they want.”

Mr. Baker says that, historically, home sizes go down during a recession.

“But, honestly, we were hearing about home sizes getting smaller before this current downturn, particularly at the upper end of the market,” says Mr. Baker. “Homes that are 5,000 to 6,000 square feet or larger are the ones that we’ve seen get smaller. This probably started about five to seven years ago at the higher end, when buyers realized that they did not want to overbuy or buy something that would be harder to sell.”

Mr. Baker says that he does not expect a long-term trend toward smaller homes to take hold in the lower end or “starter home” part of the national real estate market since families are often looking for as much space as possible.

Robert Guaglianone, chief operating officer for Airston Group Inc., a local builder, says, “We have introduced smaller single-family homes at Cardinal Fields in Warrenton because we believe buyers are looking for greater affordability. Our higher-end homes in that community have about 4,000 square feet and are priced in the $500,000s, which was considered affordable just a few years ago. But now, for that marketplace, affordable homes are considered to be those priced in the upper $300,000s and the low $400,000s.”

Mr. Guaglianone says a second major consideration for today’s buyers, in addition to affordability, is the potential chance for future appreciation.

“Buyers want an affordable monthly payment and a home that meets their needs, with the reasonable possibility of appreciation in value in five to seven years,” says Mr. Guaglianone.

Don Knutson, mid-Atlantic region president of Beazer Homes Corp., which builds homes in 19 states, believes that while price is an important driver in reducing home sizes, there are other factors that will contribute toward a continuing trend of smaller homes even when the economy improves.

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