My first post on this subject outlined the main challenges we'll be facing in the next 5 to 10 years.  Now I'm going to start focusing on each of these challenges one at a time.  I enjoy reading the responses by my readers, and one exchange in particular spurred me to write this follow-up.

Homes of the future may begin resembling homes of the past.  In other words, if you've ever traveled through older neighborhoods, look at the home sizes as you progress through the decades.  1930's-40's you see cottage style floor-plans, 2 bedrooms, 1 bath, kitchen, living area and basement of similar size.  It's rare to see more then 2 bathrooms in these type of homes. Then in the 50's and 60's, floor plans became slightly bigger and the ranch style floor plan came into style, with 3 bedrooms, 2 bath's on the main-floor.  Multilevel homes began to surface again, but actual average square foot above grade was not much different then your ranch style single level home.

The 1970's and 80's brought the multi-level plan into vogue.  Designed to fit within the footprint of a ranch or rambler, these new designs added bedrooms and utilized basement space more efficiently.  I think part of the attraction to this design was that actual above grade square footage was less then the traditional two story home. Then in the late 1990's and early 2000's, homes sizes began to increase.  Custom homes became the rage, with designs expanding beyond the basic ranch footprints. 

Then land speculation hit it's zenith in 2004, and lot's were developed at record rates.  Every increasing building costs, coupled with ridiculous land speculation, and builders were almost forced to build bigger and bigger homes.  These were not necessarly better designs, but they were filled with "extra's" which would allow the builder to actually make some type of profit.  I don't think the small builder/contractor necessarily became rich in the mid-2000's, but were forced due to the market to produce these giant homes that no one wants now.

So where do we go from here?  The reality is going to be a tough one for many to accept.  Luxury homes are a thing of the past.  Yes, your mega-millionaires will still be buying these homes, but the average Joe is done paying the mortgage, the huge utilities, and excessive taxes.  The impact on communities is going to shattering, with reduced property tax revenue, and future planning that will have to be modified.

Environmental concerns are not going away with reduced demand.  In fact you will see energy efficient designs become even more desired as we progress into the next decade.  "Green" living is becoming more in vogue, and not just for the environmental impact, I think many will see this as a more efficient way to keep utility costs down.  I also envision future developers also including "alternative power" options as ways to help bring costs down for builders and home owners.  I wouldn't be surprised to see future neighborhoods that partner with Wind Farm's, Solar farms, or other future alternative energy coops.  Your also going to see local governments clamp down on landscaping, especially in the drought Southwest. 

I also wouldn't be suprised to see that builders add many high end conservation features to homes in the future. Recycleable water, alternative energy with optional supplementation from the normal power grid.  I can imagine that wood and coal burning stoves will come back as an industry, especilally outside major metropolitian area's where smog controls rule these out. 

Therefore, instead of Granite counters and huge cathedral ceilings, your probably going to see tightly designed square foot homes, designed to save money in regards to heat, electricity, and maximize water conservation.  I'm sure aesthetic value will still be necessary, but the Japanese and European home designs will now become a staple in the US market. Build them smaller, build them cheaper, build them efficient will be the new motto.