Now, 1985 happens to be the year I bought my first home (a solid one-story bungalow circa 1940s) in what was then the New York City exurbs. We closed in the Spring, as interest rates ducked just under 13%, and our monthly payments, points included, made for spaghetti dinners to last a lifetime. That year, fewer than one in five new single-family homes--18%--had four bedrooms or more. One in four new single-family homes had two bedrooms or less. Thirty years later, almost half the new homes sold have four bedrooms or more, while 10%, one in 10, has two bedrooms or less.
Yes, this is another of those pieces on what home builders--in aggregate--are building these days and offering for sale vs. what is not being built and offered for sale. What is being built has, inarguably, done nicely and met a need, particularly among "haves" buyers, ones who can pay at least some good percentage of cash and/or gain access to the mortgage credit lockbox. What is not being built, on the other hand, may be ignoring a need in ways we may prefer to deny. But those needs are there, and it may not only be disadvantageous, but dangerous to continue to deny them.
For clarity's sake, let's do a thought exercise to get at a point. The point is, is there a need for new homes at "within reach" price points for buyers who may feel they're priced out of the current market for new homes, which are selling on average--nationally--for $300k or so.
Here are two images of homes. Which strikes you as "hotter," as in "more likely to sell at a price the seller is looking for?"
First, let's take a look at an image generated by the U.S. Census, which shows a kind of cobbled, composite view of a typical new single-family home sold in the United States in 2014. If you click on the image, you will arrive at a fascinating interactive that will tell you the characteristics of new homes being built today, compared on a series of fun and important metrics going back to when you either built or bought your first home.
Here are some highlights of new home characteristics from 2014.
Of the 437,000 single-family homes sold in 2014:
- 17,000 were in an age-restricted development.
- 314,000 were in a homeowners’ association.
- 169,000 had one story, 244,000 had two stories, and 25,000 had three stories or more.
- 311,000 were paid for using conventional financing and 37,000 were paid for in cash.
- 137,000 had both a patio and a porch.
- The average sales price of new single-family homes sold was $345,800.
The average price per square foot for new single-family homes sold was $97.09.
The median size of a new single-family home sold was 2,506 square feet.
Now, take a look at another house, one its designers, Swedish architects Tham & Videgård have done in collaboration with the Zillow of Sweden, Hemmet, are calling the House of Clicks.
Here is a home that is a composite of a different kind. It's the interpretation two Swedish architects have made by analysing 200 million clicks and 86,000 listings on Sweden’s most popular property portal, creating a house that represents how the Swedes want to live right now.
Setting aside, for a moment, cultural, geographical, zoning, and planning guidelines, the notion that data analytics can shed so much light, directionally, on what home buyers anywhere might want, the implications boggle the mind.
At ourHousing Leadership Summit in Miami a few weeks ago, our invited keynote speaker, tech and design guru John Maeda affirmed two relevant insights that can help you decide "which house is hotter."
One, he pointed out that what he's seen as technology and automation accelerate their way into our every day work lives at every turn and on every front is this: Technology (i.e. big data) is good at answers. People are good at questions. If you decide you don't need one or the other, let us know.
Secondly, Maeda answered a question in a most intriguing way. The question to this expert on a futuristic vision of the convergence of design and technology was this: "What's next?"
Maeda didn't miss a beat in his wry, soft-spoken response as he addressed a roomful of home building's leaders.
"Is it virtual reality? Maybe. But, when I think about what's next, I am fascinated by what I'm hearing here today--among home building company executives, developers, and residential stakeholders. Technology [and clicks] can get us only so far. You actually talk to people every day."
That may be what's next.