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Here's a Shocker- People Can't Afford McMansions!

By
Real Estate Agent with The Benya Group 618516
   

    Incredible- it's taken years for developers to see that the concept of "build it bigger!" simply doesn't cut it.  Here in Charles County there is a minimum home size for new construction- 1,650 square feet.  That number has been inconsequential during the past real estate boom because people were eagerly buying homes that were 3,000+ sf, and it seems that now people's tightening budgets are forcing them to look at more modest homes.

 Link: Smaller is better for homes, say builders

    When I look at who's buying homes right now, the vast majority seem to be first time Maryland home buyers, looking to purchase what they can afford, and with the lending crunch, that makes it difficult, if not impossible, to buy these sprawling homes on postage stamp lots.

    It's a simple idea, really.  Build homes that people can AFFORD.  If that means reducing the minimum home size to 1,400 square feet, builders should be able to offer new homes for less than $300,000, and in return buyers will be able to afford to purchase their first home.

    I've noticed that people looking to buy real estate in Waldorf are confronted with this problem:  The cheapest single family rambler, built new, is just under 360k, without any improvements/upgrades.  For that price they could buy re-sale for under 290k, with more square footage (less than 2,000 sf.).  Simply put, this needs to change, and new construction needs to be built smaller in order to be more affordable.

    I think that the local commissioners need to take a good hard look at what's happening in our local region, because home ownership costs are a SERIOUS concern.  It's hard to entice people and businesses to move to a region that does not have affordable housing.  It's not that the region is completely devoid of modest single family homes, but NEW developments simply don't match the description, and that NEEDS to change.


Lisa Marie Thomas
Prudential - Salt Lake City, UT

I could sell 10 homes everyday if we had "afford-ably" priced homes to sell.  As it is I think that people are bitting off more than they can chew and that is why we are in such a foreclosure mess.  i guess the idea of building homes that people can buy is beyond comprehension.

Apr 04, 2008 05:16 AM
Jonathan Benya
The Benya Group - Waldorf, MD
The Benya Group
Lisa-  It's frustrating, but ownership is falling and average home size is rising....  seems to me that people are obviously priced out, and size is a big factor!
Apr 04, 2008 05:22 AM
Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation

With the price of land in this area, builders really can't afford to construct those small homes like you have in St. Charles.  Part of that is the political pressure for larger building lots, which exacerbates the problem - not to mention the developers' covenants and bylaws with minimum square footage for the improvements.  We can't expect builders to work without profit any more than we do ourselves.  There's really more to this problem than builders choosing to focus on high-priced homes.  It would help if you go to those local commissioners with a SOLUTION and not just a gripe or suggestion.  Just my 2 cents!

Apr 04, 2008 05:46 AM
Goomzee Corporation
Goomzee Corporation - Missoula, MT
www.goomzee.com

Jonathan, I know EXACTLY what you mean.  Where I live, a minute population of the young professionals can afford a home here.  It's Montana.  A place where a lot of people take full advantage of their environment and find it difficult to leave... then again, they find it difficult to stay.  Pay is low, cost of living is high and they can find better paying jobs and cheaper living in other areas around the country.  It's pretty unfortunate that it has to be like that.  No wonder the foreclosure rate is going through the roof.  And I swear the size of homes keeps getting bigger and bigger.

Great post! 

Apr 04, 2008 05:57 AM
Patrice Estess
PB APPRAISALS - Kerhonkson, NY
thus part of the reason for the current state of the market...hello, it is about time everyone looked at this.  Thanx for this post
Apr 04, 2008 06:13 AM
Jonathan Benya
The Benya Group - Waldorf, MD
The Benya Group

Margaret-  Fortunately, builders have taken the initiative to push for the permission to build smaller.  ACPT, who built the St. Charles PUD, it putting together document to outline the need for smaller homes and/or and workforce housing program to make homes more affordable.  I plan on speaking at the next commissioners public meeting in regards to this, because I think it's necessary to see the development changes!

Erika-  The average home size has doubled in the last 20 years.  It's a self feeding syndrome... builders build bigger, homes cost more, builders are forced to pay more for the land, homes cost even more.... and it has continued in this upwards cycle.  I think we're about to see a serious re-examination of trends and values in order to make homes affordable again. 

Apr 04, 2008 06:14 AM
Jonathan Benya
The Benya Group - Waldorf, MD
The Benya Group
Patrice-  It is a part of the market, although I don't think it's the catalyst, just another piece of the pie.
Apr 04, 2008 06:21 AM
Jessica Bigger
Bigger Communications - Reston, VA
Freelance Real Estate Business Writer
Jon - Well said!  I don't understand it either.  Funny, when you live in a huge home or mansion, it costs more to heat, clean, your utility bill is enormous, plus you probably have to commute further than most (cost or gas and wear and tear on your car).  Not to mention, when folks get older they need to downsize because their mcmansion has become too much house and too much of a burden for them.  Only so many folks out there who really can afford a home that big.  I'm happy living in my 1900 sq ft Victorian.  It's perfect and doesn't cost a ton to heat and/or clean. 
Apr 04, 2008 07:51 AM
Konnie Mac McCarthy
MacNificent Properties, LLC - Cobb Island, MD
Broker/Owner - VA & MD "Time To Get A Move On!"
it's happening in Falls Church too in Pimmit Hills..these massive homes on these tiny lots...it's amazing..
Apr 05, 2008 03:03 PM
Rick Tourgee
Robert Paul Properties, Inc. - Provincetown, MA
Provincetown and Cape Cod
Great post!  I, myself, am a testimonial to what you are saying.  Here at this end of Cape Cod, homes are quite expensive compared to other areas.  In 2004, I bought a cape style 3 bedroom home with 1,575 square feet, a perfect size......not too big, not too small......and I LOVE my house!  Obviously, in my business I see a lot of homes.  I have not seen a home that I would consider selling house for!  Plus, my mortgage payments are paid ahead and I sleep well at night!
Apr 06, 2008 12:11 AM