Daybreak Maps Pictures Archives Green Page Real Estate

Wednesday, June 4, 2008

Are Houses in Utah Getting Smaller?

Are Utah Homes Shrinking? Since the beginning of suburbia after WWII homes across the country have been getting larger. The average home back then was about 1100 square feet. In the 1970s this size grew to 1600 square feet. Presently the average American home is 2300 square feet. This may still sound fairly small, but the calculations for this figure do not include basements, bonus rooms, or garages. Now this trend is reversing itself. According to recent reports the average size of the American home is beginning to shrink. This downsizing is attributed to rising fuel costs, the “green” movement, and an aging population.

The leading edge of the baby boomer population just turned 62. This demographic is getting ready for retirement and the majority are becoming empty nesters. Since they do not have kids and want to stretch their retirement dollar, buying a smaller home in a nice community is becoming a priority. One of the new features in the new North Shore Village will be residential construction targeted specifically at the aging baby boomer population. While Kennecott had this in mind earlier it did not make it off of the drawing board into Eastlake Village. Now that lending standards have been tightened and less people can qualify for a loan, homes are not selling very well and there is a large inventory on the market. However, these baby boomers usually do not have trouble qualifying for financing and half of them buy their retirement homes with cash. This is a great market to target given the circumstances.

Another target market is the green movement. The whole philosophy behind Daybreak promotes sustainable communities. This “green” philosophy is not necessarily embodied in a 5000 square foot house. (Although some homes in Daybreak exceed this size) Even with the energy saving appliances and energy star certified home, a house that big is an energy waster if you have a small family. More than likely you don’t use half of the rooms of that house daily. Rising utility and maintenance costs of a home that large is becoming more of a disincentive to potential buyers as well. Another disincentive is the rising cost of transportation. If you live in South Jordan , chances are that you work somewhere else in the valley and commute. This will be a problem for Daybreak residents in the near future, but in 2010 TRAX will alleviate that burden for some residents and the Mountain View Corridor (Later) will be the choice of others.

Preferences are changing along with demographics as a survey from the National Association of Home Builders has found that 60% of home buyers now prefer an amenity-rich smaller home. Studies also suggest that buyer preferences toward huge suburban lots are also waning. Caring for a full acre of property can be time-consuming and expensive. With both of these resources becoming more scarce, it is no wonder buyers are looking for small lots or maintenance free communities. If the trend toward smaller homes continues, then it could make a big difference in home values. A recent study by the online appraisal service found that less expensive homes appreciate more than expensive and presumably larger homes. If this trend continues, we will probably find that Mcmansions will represent the weakest portion of the market.

Many will say that with a low-interest mortgage you will get more house for your money. However, you will also get higher insurance premiums, utility bills, maintenance costs, and higher property taxes. With these costs and trends, homes in Utah will definitely get smaller. Those homes that are smaller, energy efficient, and convenient will also see the most appreciation in the future.

No comments: