After running my weekly analysis of what's going on in the Mountain Home, Idaho real estate market, I'm now of the suspicion (and working towards the conclusion) that new home prices may have finally reached the point where local builders are drafting new game plans. In 2007, for the first time in practically forever, the median size of a new home was smaller than in the year before. The difference was small, only about 6%, and one year does not a trend make but it is something I'm watching closely.
Apparently at least one Mountain Home builder has taken notice and is offering a line of smaller homes but built to the same quality levels as his larger homes. These "mini-mansions" eliminate all wasted space and generate maximum utility from every square foot of house. They're attractive, energy efficient and should appeal to several segments of the home buying public. Will other builders follow? If they want to remain competitive they may have to.
Unless the immutable laws of economics are repealed, it's likely that the house itself isn't the only thing that will be shrinking. Since land costs (including significant permit, impact and and other regulatory fees) make up 25-35% of the price of the typical new home, reduced lot sizes and higher densities are probably not far behind.
Although smaller homes and higher density development may be an unwelcome change for many, its not without its benefits one of which is reducing the impact of housing on the environment.
Jan DeGiorgio - Associate Broker
Century 21 Southern Idaho Realty
Mountain Home, ID