It wasn’t a blip. The big house really is going away. At least for now.
Average single family home sizes declined from 2,520 square feet in 2008 to 2,480 square feet in 2009, breaking nearly 30 years of uninterrupted growth. And the correction is likely to continue well into 2010, NAHB Assistant Vice President of Survey Research Rose Quint announced in a Wednesday press conference at the International Builders’ Show (IBS) in Las Vegas.
Will home sizes will beef back up as soon as the economy rebounds? Quint doesn’t think so. “First of all, you have the impact of first-time buyers, who will remain a very big share of housing market for the foreseeable future,” she predicted. “Second, the era of easy money where you go out and buy $800,000 worth of home is over. Today you have to put 20% down. And now that piggyback loans are not available, you are only going to buy what you need.” Those factors, combined with rising interest in energy efficiency, suggest that home sizes, which peaked two years ago, will now continue to level off, she said.
As houses shrink overall, so are their room counts. Last year the number of homes with three or more bathrooms declined for first time since 1992 from about 28% to 24%, according to NAHB figures. Bedroom counts are also dropping. The number of homes with 4 or more bedrooms fell from nearly 40% to about 32%.
The share of homes with two or more stories peaked in 2006 and is now also trending backwards.
When asked about their plans for 2010, an overwhelming majority of builders told NAHB that they will build lower priced models (95%) and smaller homes (96%) with a particular focus on energy savings and performance. Features such as insulated front doors, low-E windows, programmable thermostats, high-performance appliances and energy-efficient lighting were among the features builders said they are most likely to put in new homes.
Meanwhile, luxuries such as two-story foyers and master baths with multiple shower heads were among the goodies builders said they were least likely to include in new houses moving forward.
Cavernous foyers (now perceived as energy hogs) have fallen out of favor, but there is still a place for high ceilings. “Many builders will still try to save on costs and square footage by combining the great room and kitchen,” Quint said. “As they cut down on square footage, they make up for that loss by raising the ceiling height on the first floor to create a feeling of space.” Eight-foot ceilings on the first floor were on survey respondents “least likely to include” list, while great rooms and 9-foot ceilings on the main level topped the “most likely” list.
The results of a consumer survey of Better Homes and Gardens (BHG) readers, also announced during the press conference, suggests that home buyers are aligned with builders in their thinking. Features consumers said they most wanted in a new home included efficient HVAC systems (76%), Energy Star appliances (79%), efficient design (66%) and natural light (65%).
Some 67% of consumers said they wanted a kitchen with an everyday eating area, and 62% said they wanted a comfortable family gathering space. “There’s been a circling of the wagons for a lot of people, and they are focusing more on family together time,” said Eliot Nusbaum, the magazine's executive editor of home design.
In that same survey, 65% of home buyers said they wanted an extra bedroom and bath, a desire which Nusbaum attributed to growing numbers of adult children moving back home or elderly parents living under the same roof.
One thing today’s consumers are less interested in, according to BHG data, is master bedroom suites resembling hotel rooms. “There is much more of a saving and splurging mentality now,” Nusbaum said. “People want plush but not opulent. They would rather spend money in other places like the kitchen or bath, and they are willing to trade off on some things to get other things they want. Maybe having the high-end tile or stone means they spend less on wall treatments or counters. If they still want granite and stainless steel in the kitchen, something else has to give, whether it’s flooring or cabinets.”
Jenny Sullivan is a senior editor covering architecture, design and community planning for BUILDER.
Learn more about markets featured in this article: Las Vegas, NV.