The American hunger for ever-larger homes may be waning. The National Association of Home Builders predicts the average size of a new-built home will hold steady at about 2,500 square feet, maybe even shrink a little.
This is not, by the way, a Sun Belt issue. While there is relatively little construction in the Northeast, what does get built tends to be gargantuan. New homes in the Northeast averaged 2,612 square feet in 2006, by far the largest in the nation.
It's possible our homes are simply large enough. Maybe someone noticed the formal dining room is never used, the rec room door hasn't been cracked in three months, and the guest suite doesn't draw as many guests as expected.
A Palm Beach family moved into a new mansion and a week later decided it was simply too big: "There's a big difference between designing a place and living in it," said the Realtor now selling the home, according to the Palm Beach Post.
There are some demographic possibilities too: The number of people who live in the average home continues to decline. The cost of heating a mansion, or commuting to exurbia, continues to rise. And wealthy buyers increasingly are focused on construction quality and proximity to cultural attractions such as restaurants, museums and shopping.
Consider the lede from a recent AP story on the subject:
Mendy Fisher had a 3,000-square-foot house in the Cincinnati exurbs, where sprawling housing developments meet farmland. He had a screened-in porch, four bedrooms, ponds, geese, a clubhouse. He also had high heating costs and atrocious traffic. And he had to beg friends to visit Loveland, Ohio.
Fisher, 62, and his wife, Ginny, 59, recently traded in that space for less than half the square footage in Deer Park, Ohio, a little closer to downtown Cincinnati. It's a neighborhood that feels like one, Fisher says, where people walk their dogs in the evenings and where Fisher's drive to the synagogue takes a few minutes.
One might add that the number of people who can afford the largest homes presumably is in decline. A recent blog post by Boston Realtor John Keith highlighted the growing backlog of homes for sale at prices above $1 million. Keith found 459 such homes on the market in 12 of Boston's wealthiest suburbs. About 42 such homes sold in the last 30 days. That's a supply backlog of almost 11 months, well above healthy levels.
Still, I'm not sure I believe this trend is going to take hold. The next time new homes don't increase in size will mark the first time since the early 1990s, when the numbers flatlined for a few years at around 1,950 square feet. That was also the last time we had a long slump in housing sales. Once the slump ended, so did the plateau. I wonder whether this time will really be different.
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