Last week Joe Zekas pointed out that homebuilders are marketing lower ceilings as a trend in new homes. He cautioned that today’s metaphorical lemonade for homebuilders might be tomorrow’s lemons for owners. This reminded me of a minor storyline from the housing crisis, which is the “trend” toward smaller homes, as consumers “right-size” their houses and move closer to the city to save on heating, air conditioning, and commuting.
The only trouble is that this storyline simply does not square with history. Homebuilders in the US have been building bigger and bigger homes since the 1970s, when the Census began collecting such data. The size of new homes took a dive after the late-70s energy crisis — only to make up for lost ground through the 1980s.
It is true that the median size of a new home has dipped in the recession–but it turned upward in 2010. And here’s another point to ponder: In 1970, the average household size was 3.11 persons per household; in 2009, it was 2.60. In 2009, we were buying houses that were 42% bigger to hold 16% fewer people.
See an expanded version of this post at Lakeshore Analytics.
Jeff Baird is a real estate valuation consultant based in Chicago. He founded Lakeshore Analytics to bring comprehensive, understandable housing data and analysis to Chicago-area readers. The site features a blog with free market news and charts, summary data on 20 top neighborhoods, and quarterly data subscriptions.
No related posts.