Smaller Homes with Lower Price Tags to Drive New Construction

Economic realities and continuing demographic trends will influence the size and features of newly constructed residential homes in 2011, according to a new survey of home builders.

The average size of a newly built home in 2010 fell to 2,377 square feet, down from 2,438 square feet in 2009, according to data released at the annual International Builders’ Show in Orlando earlier this year.

The decline in home size correlates with the shrinking size of the American family.  Last year, one- and two-person households accounted for over 63% of all households while married couples made up less than 50% of all households for the first time.

Over half (52%) of builders surveyed said they will be building smaller homes in 2011 and almost three-fifths said these homes will come with less expensive pricing.  A majority of builders believed that new homes would continue to shrink in size to an average 2,152 square feet over the next few years.  Other survey findings included the following: • 68% of builders polled thought new homes would be more energy efficient. • Only 29% thought homes would include more technology. • Builders say more one-story homes will be built.

• Over half expect living rooms to be combined with other rooms. • Amenities expected to gain in popularity include low-E windows, double kitchen sinks and programmable thermostats. • 61% of builders believed the number of features offered as standard would decline.

Despite the trend toward smaller homes, demographic projections indicate that housing demand will remain robust.   There are two key factors driving the demand for housing: the increase in America’s Hispanic population, which is expected to make up 30% of the total population by 2050 (compared to 16% today), and the increase in those age 55 and older, from 25% of the overall population today to 31% by 2050.

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July 22nd, 2011 in Real Estate Online | tags: New, New Construction

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