The End of the McMansion?

By
Education & Training with Chuck Miller Education Services LLC

The size of new homes in the U.S. increased about 20 square feet per year from 1973 (the first year the Census Bureau began tracking new home size).  In 1973, the median size of a new single-family home in the U.S. was just over 1,500 square feet.  The median size peaked in 2007 at 2,309 square feet, an increaseof 54%.  The median size has declined almost 10% since then.  Will the trend to smaller-sized homes persist?

 

Historically, the median size of new single-family homes declines during recessions.  The median size of new homes declined 8.2% from 1978 to 1982. It declined slightly during the mild recession of 1990 - 1991.  And it is has been declining since 2007.

 

Why? When the housing market declines, the percentage of first-time home buyers purchasing homes increases. First-time home buyers typically buy smaller homes and they don't have an existing home to sell. During economic downturns, homeowners who want to purchase new homes typically have less equity to roll over into the new home and are also more cost conscious so they buy smaller homes.

 

But historically, the decline in size reverses itself once the economy recovers. So the question is "Will the current decline in the median size of new homes reverse itself as in past economic recoveries or have we experienced a fundamental shift."

 

Before I share my thoughts, I would like to hear what you think.

 

Chuck Miller GMB   CGP  CGB   MIRM   CMP   MCSP   CSP

President / Builder - Chuck Miller Construction Inc.

(208) 229-2553

www.chuckmillerconstruction.com

Comments (3)

David Monsour
Keller Williams Keystone Realty - Gettysburg, PA
ABR - www.realty-insights.com

Chuck - We actually discussed this in the GREEN class I took for continueing ed.  I think that energy costs are going to begin to play a roll in home size.  The personal computer has become a laptop and not a desk top pc.  Bedrooms don't need as much space for these devices.  Family sizes are smaller now, atleast they seem to be (no proof of this).  The evolution of the cell phone has changed things.  Certainly cost to build is a factor as well.  I know that I don't want a big house.  I feel like I'm never home so why pay a ton of money for somewhere I cook, and sleep. 

Dec 03, 2009 05:18 AM
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Chuck,  Interesting data.  I also noticed that once an owner has had the big house they are usually ready to downsize !

Dec 03, 2009 05:20 AM
Ron Trzcinski, 410-935-5844
Century 21, The Real Estate Centre, 410-665-0200 Office - Nottingham, MD

Chuck,

It is a good question that you pose and I do not know the answer; however, here are some factors which may lead to an increase in the median size of homes purchased in the future: more people are working from home, which may lead to the need for office space; more people are looking for in-home entertainment; and families, although generally smaller, are combining several generations.

Dec 03, 2009 05:22 AM

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