Is Small the New Big?

After years of single family homes increasing in size, the U.S. Census Bureau reports that the new single family home decreased from 2,438 square feet to 2,377 in 2010.  Here in Anchorage that doesn’t come as much of a surprise as builders have struggled to stay afloat after facing two consecutive years of the lowest number of residential building permits in twenty years.  Smaller square footage means lower costs to the builder and a reduced price to the home buyer—maybe.

I’ve recently met several owners of 4,000 to 5,000 square foot luxury homes (on the hillside, on the bluff, on Campbell Lake)  who want to move on to something smaller.  As these large, luxury homeowners grow older and their children, and sometimes grand children, leave the nest, they’re tired of the upkeep, the lawn maintenance, and the rising tax and utility costs.   They’re the great room buyers who want everything mashed into one big room, a large master bedroom and bath suite, a home office and a big kitchen to eat their take-out in.

That’s my demographic and the buyers and sellers I most often work with.  However, I have a team of young professional realtors and when I start talking about my demographic, they roll their eyes at me.  “I want a house with a family room.  I need some place for my kids to play away from the kitchen.  I need a lower level where they can watch cartoons.”

“Uhh, does this mean we’re back to the split-entry or the traditional two-story home with living, dining, kitchen and family room?”

“Call it what you will,” they tell me, “not everyone wants the great room.”  So after a lengthy discussion about the shrinking house, the only thing that both demographics don’t care about is the demise of the dining room.

What I learned from that discussion is that small may be the new big house for the aging baby boomer (still with luxury amenities, of course) but there’s a whole demographic out there that still needs space.  It may not be as big a space as a McMansion but it still needs to be divided up into adult and children areas, especially because of the confinement challenges due to our long winters.

The task for builders is to make the spaces smaller but still functional.  When shopping, look for  more multi-tasking areas, hidden nooks and crannies underneath stairwells, master bedrooms with a corner pint-size office and living spaces defined by lighting and flooring as opposed to walled off rooms.  The smart builder has begun to incorporate these spaces into his homes, including the unfinished daylight basement and potential lofts by raising trusses.

And as for those aging baby boomers who want to downsize, they’re in for sticker shock.  Small does not necessarily mean less construction costs—not when you’re not willing to give up Brazilian hardwood cherry floors, granite countertops, glass block showers and your other favorite must-haves.  However, take heart.  The real savings is not the purchase price but in the monthly expenditures for utilities, taxes and maintenance. Brand new homes are much more energy efficient and you’re not probably going to have to worry about roof replacement or furnace repairs. Those items are potentially real savings of several hundred dollars a month.  When you’re looking at retirement that can be a significant and worry free savings.