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Are smaller more eco friendly homes the future or the now?

By
Real Estate Agent with RE/MAX Hometown

Frugality is finally showing up in new home developments.

Although the number of new single-family houses sold this year will probably be down about 68 percent from the peak of almost 1.3 million sold in 2005, there will still be about 420,000 households buying new homes this year, according to the National Association of Home Builders.

But recession-chastened house hunters are looking for different things than the boom-era buyers who snapped up homes that grew bigger, fancier and pricier by the month.

Because they aren't held back by the need to sell an old home, first-time buyers now make up a greater share of the market. They're trying to stretch their dollars at every turn, and many are concerned about the cost of heating and cooling, especially after having experienced the surge in fuel costs last summer.

Builders say buyers are judging a home in terms of how comfortable it will be as a living space for the long term, rather than as an investment they can flip for a profit after a couple of years.

Choices they are making are just starting to appear in statistics. In the July-September quarter of 2008, the average size of a house under construction fell 7.3 percent, to 2,438 square feet from 2,629 square feet in the previous quarter, said Gopal Ahluwalia, vice president for research at NAHB in a recent article. "This is the first time we have seen such a significant decline," he said.

It may be only one quarter's worth of data, but Ahluwalia has other reasons to think the drop may be more than a fluke. He surveyed builders early this month, and 90 percent reported that they were building smaller homes. Eighty-nine percent said they were building lower-priced homes.

Until recently, builders have focused mostly on grand houses loaded with upgraded counter tops, flooring, cabinets and bath fixtures. Heading into the spring, which is usually peak season for home sales, many builders are calling attention to the ways their homes save money and energy. Smaller size is one way they're lowering the cost to purchase.

Builders are also paying more attention to energy-conserving and environmentally friendly features such as efficient appliances, programmable thermostats, compact fluorescent lights and paints that emit less toxic fumes, all of which are now standard features.

The smaller homes also happen to be more efficient (and less expensive) to build. That's no small matter for builders that are struggling through the worst market of their lifetimes.

The times have definitely changed from the average buyer looking for a huge home with no lot, to smaller homes with eco friendly upgrades. Wind turbine, solar, geothermal heating and cooling systems, and recycled newspaper insulation are upgrades while granite counter tops and push button gas fireplaces are becoming standard.

Change is all around us. Go with the flow. Sell what the client wants.  

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Show All Comments Sort:
Robert Havana
Park and Protect- Alberta Real Estate License Parking - Calgary, AB
Alberta Real Estate License Parking

I believe we are seeing a return to functionality and away from excess and waste.  Partially due to the green movement, but more likely due to the economy.

Jan 27, 2009 08:22 PM
Randall Sandin
Carolina One Real Estate - Charleston, SC
843-209-9667 - Search for Charleston SC Real Estate

interesting points - I had not even thought of that in our markets...smaller homes with beter use of space seem like a great way to go

Jan 27, 2009 09:42 PM
ASHEVILLE REALTY REFERRAL RESOURCE 828-776-0779
REAL ESTATE REFERRAL NETWORK - Asheville, NC
CONTACT janeAnne365@gmail.com

Mark~

 

I sure hope you will also post this in the ECO-All-Stars Group! Very interesting stats! You wrote: " Builders are also paying more attention to energy-conserving and environmentally friendly features such as efficient appliances, programmable thermostats, compact fluorescent lights and paints that emit less toxic fumes, all of which are now standard features...".

 

I am going to re-blog this as part of my "Things to Consider " Series!

Jan 29, 2009 04:50 AM