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How Much House Do You Need?

By
Real Estate Agent with Keller Williams

When buyers go home shopping, they don't always have a clear idea of what they are looking for. Initially, they may just want to have a look around to see what they can afford, or what they can reasonably expect to get for their money. Unfortunately, as a result of this preliminary survey in a market like Chicago, home buyers often find they have to adjust their expectations downward. This is often a disappointing experience that sometimes discourages buyers from purchasing a home for a long time.
To avoid some of the disappointment. it's a good idea to evaluate your space needs honestly before you go home shopping. We sometimes think we need certain spaces simply because the names of those spaces have become part of the language we use to describe house. For example, we expect a house to have a living room. To realize that such delineation is not required, think of dwellings such as converted lofts, where the space is wide open, and the definition of space is up to the occupant, and not necessarily imposed by the architecture itself. It is also possible to use this type of flexible thinking in a more traditionally designed space by carefully considering the number of occupants (including possible visitors), and the types of activities they will be performing in the space. For example:

  • Does the master bedroom need to have a sitting area (sounds nice, but will you actually use it? Maybe a porch swing could serve the same purpose)?
  • Is it absolutely necessary to have a separate bath and shower?
  • Do you need a full guest bath (might be necessary of friends or relatives often spend the night), or will a powder room suffice (it should, if guests typically only stay for dinner)?
  • Do you children all need separate bedrooms? Older homes with irregular attic spaces can accommodate kids in fun anf imaginative ways without each having a separate room.
  • Do you need a formal dining room, or is your household more casual? In that case, can dining and family activities take place in the same room? Can the dining room double as a homework/craft room?
  • Do you really need a family room AND a living room, or are the functions redundant?
  • Do you need a separate and private home office (yes, if you regularly work at home)? Or, will and alcove or unused space in another room serve your purpose (it might, if you use it for paying household bills and checking your e-mail)? Can the office double as a guest bedroom?
  • For more questions and ideas, check out The Not So Big House series by Sarah Susanka.

When evaluating you space needs, it may be helpful to consider the following home sale statistics from Chicago's north side neighborhoods for homes sold in the last six months:

  • Median price for 3-bedroom single family home: $410K vs. $530K for a 4-bedroom home
  • Median price among single family homes under 2,000 square feet: $325K; homes 2,000-3,000 square feet: $573K; homes 3,000-4,000 square feet: $775K; homes over 4,000 square feet: $1.3 million.
  • Lot size in the city of Chicago does not seem to have a huge impact on home price, but this may be quite different in suburban areas.
  • In the neighborhood of Lakeview 2-bedroom condos sold at the median price of $359K vs. $573K for 3-bedroom condos; among condos under 1,000 square feet the median price was $220K vs. $441K for those over 1,000 square feet.

Comments(7)

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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

My question is, can anyone buy a home at MEDIAN prices???

They sure can't around here. 

Median prices are only about 70% of average list and sold prices here.

I'm confused.

 

Jul 30, 2007 03:37 AM
J Perrin Cornell
Coldwell Banker Cascade Real Estate - Wenatchee, WA
Broker, ABR, VAMRES
Buyers must come to grips with needs and wants and budget.... sometimes mutually exclusive.
Jul 30, 2007 03:38 AM
Justyna Frank
Keller Williams - Chicago, IL
ABR

Lenn, I used actual median (middle value) of home prices that closed in the last six months. In my own neighborhood, the median list price is $569K, and the median sold price is $540K. But your point is well taken: prices have risen to levels few middle income families can comfortably afford. Median prices are driven up partly by new construction: tearing down older, smaller but more affordable homes, and building larger ones for the wealthier few.

Perrin, I think buyers sometimes don't look at their needs realistically: I need a bigger house for all my stuff... I have such a big house and so much stuff, that I NEED a cleaning lady... I NEED to work more so I can afford to pay the cleaning lady... and finally: I NEED more time! 

Jul 30, 2007 03:56 AM
Brian Myers
Signature Properties in Scottsdale, AZ - Paradise Valley, AZ
Scottsdale & Paradise Valley, AZ Real Estate Agent
I would be shocked if more than fifty percent of the clients actually could tell you what a SQFT actually means.  Most Buyers I run into do not have a clue on how much SQFT they actually live in.  They may think they know, but I do a little exercise with them to determine the real amount.  I often, like I am sure most agents, run into clients who want 2000+ in North Scottsdale for $350,000.  They are more interested in area than the SQFT.  So I start breaking down there lifestyle with them.  How many kids, how many times a year do they have company, how many cars do they have?  By the time we are done with the exercise, they have a great place for $350,000 in North Scottsdale that is 1400 SQFT and both the husband and wife are happy because the respective in-laws are at a hotel when they come to visit!
Jul 30, 2007 04:05 AM
Justyna Frank
Keller Williams - Chicago, IL
ABR

Brian, not only do buyers not know about square footage, listing agents are not better. In many listing, square footage is omitted. In new construction, different conventions are used, so a condo that has a useable area of 760 sf may be listed as having 950! I used sf in my post to illustrate the huge difference in prices for larger sized homes. I like your approach with the buyers.  

Jul 30, 2007 04:13 AM
David Helm
Helm Home Inspections - Bellingham, WA
Bellingham, Wa. Licensed Home Insp
There is an entire movement in this country toward smaller homes.  My personal philosophy emphasises quality of construction over size.  In this area, most larger homes are built/bought by older couples who do it because they can.  I cannot imagine (as part of an older couple) trying to live in a 5000 sq. ft. home.  There is a series of books, written by an architect named Sarah Susanka, extolling the virtues of smaller homes.  The first in the series is The Not So Big House.  It is a must read for realtors and anyone thinking of building/buying a home.  In my building years (30 years worth), I always emphasized the quality of the structure first (invisible to buyers, but essential for the durability and livability of the home).  This is the most important area to put money into.  Unfortunately, in today's market, the main emphasis is on cosmetics.  Granite countertops don't make the structure any better.   Thanks for letting me rant.
Jul 30, 2007 04:23 AM
Susan Haughton
Long and Foster REALTORS (703) 470-4545 - Alexandria, VA
Susan & Mindy Team...Honesty. Integrity. Results.

Excellent post, especially since you invoke The Not So Big House series, which are among my favorite books.  Gosh, how many times do you get a call from a client who says, "And I NEED xxx s.f....because we have this and this and this..." 

A lot of the "need" for large space is because we are wasteful with the space we have...we go OUT instead of up or don't utilize creative storage options. Don't get me wrong -- if someone wants tons of space and can afford it, hey, go for it. That is totally up to them.  But I do think we don't efficiently manage the space we have...no matter how much s.f. we have, we WILL fill it.

Excellent point above about guest rooms...I am the first to admit we have 2...one serves as a GREAT space for laundry that is clean but not yet folded...and one is a GREAT space for all those things that need to be filed but are not.  How many hotel rooms COULD we pay for with the money we spent per s.f. for those two extra bedrooms??? 

Unfortunately, though, it IS hard to convince people they can do without so much space because they cannot envision, they cannot "see" how that can be.  I LOVE going into small, well organized spaces...so often, they are so much cozier and appealing.

Jul 30, 2007 04:23 AM