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There is no way people will make a wholesale change to smaller spaces. People want more space. In order to lower the price, builders will start cutting out the high end finishes typically found in larger homes. The days of 1200 sq ft homes were left behind years ago and won't be making a comeback.
We are going to Texas soon on an informational trip, planning for a move most likely to Round Rock. It will be just the two of us. All two people "need" is a 20 x 20 room and a roof. Anything beyond that is a "want". Our future house must have its own pool, a two or three car garage, a medium to large master with a high end MB, a big upgraded kitchen, medium to large living room, a media room for my equipment, a medium guest bedroom, a guest den and multiple walk-ins. Add it up and it will be a sizable house. What we don't need is a formal dining room. We find that to be a waste of space.
That was certainly entertaining to watch and seems like a good solution for them. I wouldn't ever want to live like that. I much prefer the American way of living. A combination of space, enjoyment and green living. I couldn't ever be around that many people. Wide open spaces please.
Living spaces in Japan are very tiny. and usually several generations living together. There are many places in the US where Japanese families are sent to live for several years on business assignments. One is Peachtree City, just south of Atlanta. There they find these huge houses and their kids grow up very Americanized. What a culture shock to have to return to the tiny sized homes in Japan. Even if they wanted to, they could not find tiny houses In USA to live in and be close to work. I really feel for them.
"There is no way people will make a wholesale change to smaller spaces."
I think you're very wrong, my friend. There is a downsizing effect in all aspects of peoples lives in the United States. The majority of home sales in that lower price segment is where the market is.
Even if they want it, consumers can't get the same loans they did 4-5 years ago on a house. The same people that got approved for a 400k house 4 years ago might be lucky to get 275-300k today. It's so much harder to qualify for loans and the banks are scrutenizing eveything. People in a way are being forced to downsize. But many are doing it on their own anyway.
Lot of consumers got their lives wrecked over the last 2-3 years with the economy. My life got turrned upsidedown as well. And I'll never go back to the way I was before.
After the painfull process of selling my last house, I'll never over-extend myself of a home purchase. Assuming you're going to be making more money every year and that your house will always go up in value. It's not true.
I've been in the automotive industry for over 5 years. And people are not buying the bigggest gas guzzling vehicles like they did in the past. When gas hit $5 a gallon - it changed people. Amd they're not going back like they did in the past. The car industry has gone on a huge downsizing effect, and smaller, more fuel efficent cars are what people are after.
I went from a 2500 SF house to a 850 SF apt. And I'm happier than I ever been. I could care less about looking for 2500-3000 SF houses like I did 2 years ago. Always thinking of the next biggest place and how I can move up. That's not on my mind anymore. The next house I buy will be modest.
Always buy below what you can really afford is the rule to financial stability. But few people did that in the past in the housing market and too mcuh was on specualtion of the market and trying to make money, rather that finding the right palce to live.
Hah! Gotcha beat! Raised in family of 8; 1500-square-foot home (built in 1910), 1 bathroom for most of the time, then they added a half-bath. (3 bedrooms: 3 boys in one, 3 girls in another, and parents' room.) No garage. FT mom at home. Private elementary school. We were an active, happy family. No one ever told us we were missing anything.
I don't know HOW we did it, but we also survived without granite countertops or stainless steel appliances!!! Imagine!
I got you beat!
family of 10, that's right, 8 kids. 1100 square foot house with a semi-finished attic (that the 5 girls shared while the 3 of us boys had 2nd bedroom on the main level). ONE not 1.5, but ONE bathroom, 1 car semi-attached garage that we NEVER parked the car in even in winter when there would be 3+ feet of snow on the ground at times. We also had a cottage (about the same size, no attic but with one extra bedroom) on Lake Ontario about an hour from our house. Mortgage on both of the properties combined was less than $100 (parents bought both homes in the mid 50's). All but the very youngest of us went to catholic school.
Flash forward 25 years and by my mid 30's I'd built a 3700 square foot home for my family of (then) 4 in the prestigious Lochmere in Cary. When the first recession hit in the early 2000's, I lost a lot of business and though we COULD have kept the lochmere house we chose to downsize to a 4 bedroom, 1800/1900 sq ft brand new house in south Raleigh. Had a surprise addition to our family and 7 years (and 2 more moves later!) are now in a 2000 Sq ft house with one in college, one about to go to college, and one about to start 2nd grade.
I designed the big Lochmere house and for that reason I really miss it and it hurt a lot to sell it. If I'd held onto it for about 3 more years I probably could have sold it for over $500k (built it for just a little over $300k). But it was also a lot of house and would have been more room than we needed for our family. I can understand similarly sized families feeling more comfortable in a house that size and more power to them for the upkeep it requires. It's simply different strokes for different folks.
But OUR cottage on Lake Ontario (same neighborhood as yours, an hour away!) was only about 450 square feet for our family of 8! We also had fun camping all over in our trailer and going on the river and lake on our boat.
And all of this sort of proves that our parents were not "house poor" as so many people are (and have been) these days. Instead, they spent their money having lots of fun with their families.
Quote:
Originally Posted by I'minformed2
I got you beat!
family of 10, that's right, 8 kids. 1100 square foot house with a semi-finished attic (that the 5 girls shared while the 3 of us boys had 2nd bedroom on the main level). ONE not 1.5, but ONE bathroom, 1 car semi-attached garage that we NEVER parked the car in even in winter when there would be 3+ feet of snow on the ground at times. We also had a cottage (about the same size, no attic but with one extra bedroom) on Lake Ontario about an hour from our house. Mortgage on both of the properties combined was less than $100 (parents bought both homes in the mid 50's). All but the very youngest of us went to catholic school.
Flash forward 25 years and by my mid 30's I'd built a 3700 square foot home for my family of (then) 4 in the prestigious Lochmere in Cary. When the first recession hit in the early 2000's, I lost a lot of business and though we COULD have kept the lochmere house we chose to downsize to a 4 bedroom, 1800/1900 sq ft brand new house in south Raleigh. Had a surprise addition to our family and 7 years (and 2 more moves later!) are now in a 2000 Sq ft house with one in college, one about to go to college, and one about to start 2nd grade.
I designed the big Lochmere house and for that reason I really miss it and it hurt a lot to sell it. If I'd held onto it for about 3 more years I probably could have sold it for over $500k (built it for just a little over $300k). But it was also a lot of house and would have been more room than we needed for our family. I can understand similarly sized families feeling more comfortable in a house that size and more power to them for the upkeep it requires. It's simply different strokes for different folks.
"There is no way people will make a wholesale change to smaller spaces."
I think you're very wrong, my friend. There is a downsizing effect in all aspects of peoples lives in the United States. The majority of home sales in that lower price segment is where the market is.
Even if they want it, consumers can't get the same loans they did 4-5 years ago on a house. The same people that got approved for a 400k house 4 years ago might be lucky to get 275-300k today. It's so much harder to qualify for loans and the banks are scrutenizing eveything. People in a way are being forced to downsize. But many are doing it on their own anyway.
Lot of consumers got their lives wrecked over the last 2-3 years with the economy. My life got turrned upsidedown as well. And I'll never go back to the way I was before.
After the painfull process of selling my last house, I'll never over-extend myself of a home purchase. Assuming you're going to be making more money every year and that your house will always go up in value. It's not true.
I've been in the automotive industry for over 5 years. And people are not buying the bigggest gas guzzling vehicles like they did in the past. When gas hit $5 a gallon - it changed people. Amd they're not going back like they did in the past. The car industry has gone on a huge downsizing effect, and smaller, more fuel efficent cars are what people are after.
I went from a 2500 SF house to a 850 SF apt. And I'm happier than I ever been. I could care less about looking for 2500-3000 SF houses like I did 2 years ago. Always thinking of the next biggest place and how I can move up. That's not on my mind anymore. The next house I buy will be modest.
Always buy below what you can really afford is the rule to financial stability. But few people did that in the past in the housing market and too mcuh was on specualtion of the market and trying to make money, rather that finding the right palce to live.
You make great points and I agree with you for the most part. The only caveat is human nature. Cutting back is always temporary. Just like the sales of scooters when gas prices are high, then no so much when prices come down. Human nature always wins out in the end and people want more.
I would love to see 1500 to 2500 sq ft homes with quality finishes be the norm, but they won't be. The margins are too slim for builders to invest in high end finishes for smaller homes. Building as large as they can, while cutting back extras will provide the biggest bang for their wallets. That's where the buck stops, unfortunately.
You make great points and I agree with you for the most part. The only caveat is human nature. Cutting back is always temporary. Just like the sales of scooters when gas prices are high, then no so much when prices come down. Human nature always wins out in the end and people want more.
I would love to see 1500 to 2500 sq ft homes with quality finishes be the norm, but they won't be. The margins are too slim for builders to invest in high end finishes for smaller homes. Building as large as they can, while cutting back extras will provide the biggest bang for their wallets. That's where the buck stops, unfortunately.
You hit the nail on the head when you said "The margins are too slim for builders to invest in high end finishes for smaller homes".
I have asked builders WHY they don't build the houses that seem to sell, like Dalton's Ridge, Riverwalk in Bedford, Heritage Hills in Wake Forest, Harrington Pointe. They tell me that the price of land is so expensive that they have to build larger homes to make a profit. I wonder.
When the market came to a standstill and builders had to reduce their inventory of new homes, the more expensive homes were reduced $20,000 and $30,000 and more!
Maybe someone needs to find some land in a desirable area and consider building a new neighborhood!
You hit the nail on the head when you said "The margins are too slim for builders to invest in high end finishes for smaller homes".
I have asked builders WHY they don't build the houses that seem to sell, like Dalton's Ridge, Riverwalk in Bedford, Heritage Hills in Wake Forest, Harrington Pointe. They tell me that the price of land is so expensive that they have to build larger homes to make a profit. I wonder.
When the market came to a standstill and builders had to reduce their inventory of new homes, the more expensive homes were reduced $20,000 and $30,000 and more!
Maybe someone needs to find some land in a desirable area and consider building a new neighborhood!
Vicki
So the builders do not want to build the homes that buyers seem to want. Can we speculate that the home building business will continue to suffer until the buyers and builders can get their priorities aligned?
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