Saturday, July 24, 2010

MARKET TRENDS: Homes Getting Smaller and Other Trends

July 09—Two new sets of research provide plenty of insight about how we’ve gotten used to living and also offer a glimpse of what we might want next.

The first set of findings, released this month by the Department of Housing and Urban Development, shows most American households have gotten downright comfortable—that is, except for the 1 percent of homes that don’t have indoor plumbing.

There is a cautionary note contained in the 2009 American Housing Survey, however. Only 36 percent of U.S. homes have a working carbon monoxide detector.

Government researchers also found the median home size was 1,500 square feet, compared with 1,610 square feet in 1973, and the lot size for single-family homes is down from a median of 0.36 acres in 1973 to 0.27 acres last year.

People are packing a lot of amenities into their living space. Most homes have at least six rooms and three or more bedrooms, and 51 percent of homes have two or more bathrooms. Back in 1973, the first year the government conducted the survey on the nation’s housing stock, 19 percent of homes had at least two bathrooms.

Amenities that most homes have include a dishwasher, 66 percent; a washing machine and clothes dryer, both 80-plus percent; and central air conditioning, 65 percent. In 1973, 17 percent of homes had central air.

Most of the increases in the number of bedrooms and bathrooms were the impact of homes built in the past few years. Is it the McMansion effect?

If it is, that’s waning, at least temporarily. Recently released U.S. Census Bureau research showed that single-family homes built in 2009 were almost 100 square feet smaller than two years earlier.

That’s not too surprising, given builders’ efforts to market less expensive homes during the economic downturn to consumers concerned about mortgage payments and energy costs.

But here’s a fun fact: Square footage comes and goes, but the attraction of stairs may be on the wane. For the past two years, ranch homes have been gaining in popularity, and last year they accounted for 47 percent of new single-family homes.

Don’t necessarily attribute the change to a difficult economy, although that’s likely responsible for last year’s lack of interest in building homes with four bedrooms and three bathrooms. Single-story homes can be more expensive to build than two-story houses because of the extra costs of a larger concrete foundation and roof. Credit some of the shift to baby boomers who want homes in which they can age gracefully.

Ronald Olen and his wife, Joan, lived in a four-story Colonial in Arlington Heights for years. Now, with their children grown, they’ve sold their home and moved into an apartment while they wait for their new ranch to be built in McHenry.

There wasn’t much discussion about what kind of home to downsize to, Ronald Olen said.

“We wanted everything on the same floor, no stairs,” he explained. “We’re getting older is what it amounts to. Lugging things up and down the stairs, we thought we really don’t need this. We’ll be better able to cope with day-to-day activities.”

Lynda Conkel, director of sales and marketing at Gerstad Builders, which is building the Olens’ home, said boomers are fueling part of the increased interest in ranches, but she thinks there’s more to it. Single and younger married buyers also like the idea of no stairs, she said, particularly because contemporary home designs are placing master bedroom suites away from other bedrooms.

“Very few people come in looking for a ranch and leave with a two-story,” Conkel said. “People do come in and say we’re looking (to) move, and some of them did come in saying they wanted a two-story and leave with a ranch.”

Maybe it’s a case of something old is new again, or maybe, both in terms of square footage and number of floors, it’s a case of what goes up, must come down.

Back in 1973, when the Census Bureau first began tracking details on single-family home construction, 67 percent of homes completed that year had one story.

By Mary Ellen Podmolik, Chicago Tribune July 9, 2010

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