Rehabbers Take Notice… Market Changes

The real estate industry has recently reported that the size of the average American home has shrunk by 11% in the past year.  To me this is important and welcomed news.  I have been steaming over young couples with no children turning their noses up to houses that are bigger than the home where my parents raised myself and my 3 siblings.

In 1950 the National Association of Home Builders reported the average home size was less than 1,000 square feet.  By 1970 it had gone up to about 1500 square feet and by 2004 it was over 2400 square feet.  And, get this, during this entire time the size of the family was shrinking and self storage units were booming.  So there were fewer people living in bigger homes who still had so much junk they had to rent additional space.

Not only are the homes big but the designs are highly inefficient.  The average homes now days have huge living, family and formal dining rooms.  The family room is where everyone spends their time.  The formal dining room and living room are used just a couple times a year.  And, people don’t realize the additional costs of those pop-outs, dormers, bay windows and additional gables that add little if any additional space.  They’re also more prone to energy loss and failure.  The cheapest square footage you can obtain is by getting your homes footprint as close to square as possible.  Every additional corner ads significant cost to a home, increases construction waist and reduces energy efficiency.  I recommend reading “The Not So Big House,” and “Good House Cheap House,” by Kira Obolensky.

Rehabbers need to take notice of this.  I posted an article on my profile concerning the topic.  The homes are shrinking due to cost constraints.  That means that you may not want to automatically put in that Jacuzzi tub and granite countertop.  Formica is making a comeback.  We are really going to have to think about where to put the value in our homes.  The desire for adding the bling factor will have to be balanced with cost constraints and efficient designs, novel concept huh.