McMansions losing their appeal

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This G.J. Gardner model is one of several plans which can include solar options.

This G.J. Gardner model is one of several plans which can include solar options.

“Jewel box” homes — well-appointed new homes, often on smaller lots with floorplans ranging from 1,000 to 2,500 square feet — represent a growing trend in residential real estate, but are price-sensitive homebuyers who face tough lending criteria also asking for green and sustainable construction and features?

While the days of 4,000-, 5,000- or 10,000-square-foot homes have come to an end since the recession began during 2007, the average new construction of American homes has shrunk by 11 percent, according to the National Association of Home Builders.

During its International Builder Show this past January, the NAHB reported the first significant decrease in new home sizes: from 2,629 square feet to 2,438 square feet, on average.

And the trend is expected to continue.

A survey of the organization’s members also revealed that 90 percent of builders have elected to build smaller homes — not only because of a softening economy hurt by mounting foreclosures and aging baby boomers, but to increased energy consciousness.

At first glance, it would be easy to assume that the two trends go hand in hand, but that’s not always the case, according to two local residential builders.

“I’d estimate maybe 10 percent of the time, ‘green’ comes up when I’m talking with new clients,” said Dennis Weets, owner of the G.J. Gardner Custom Homes franchise in Falcon. “Our average home sells for somewhere between $225,000 and $250,000. Some of our customers ask about energy efficiency and getting off the power grid. A couple have mentioned solar or geo-thermal options, for example, but a lot of folks — especially those looking at a lower-priced home are on such tight budgets, they’re just worried about getting a loan.”

But the impetus is there, he said.

G.J. Gardner has 13 floor plans with solar options and a patented “zero carbon system” to comply with legislation signed by Gov. Bill Ritter that requires new homes to include solar-ready wiring.

The Housing and Building Association of Colorado Springs also has gotten on board, sponsoring monthly classes designed to bring members up to speed on the latest energy efficient practices, new home features and applicable building code requirements.

The area’s largest residential builder, Classic Homes, has geared its Freedom Series at Banning Lewis Ranch — five floor plans ranging in size from 1,800 to 2,500 square feet — to today’s cost-conscious and environmentally focused buyer.

“It’s amazing. Even without a model home, we’ve already got one home under contract after just 60 days,” said Executive Vice President Dan Winter.

Classic Homes, which just won its third consecutive award for excellent customer service from J.D. Powers & Associates, has adjusted its marketing strategies to capture more of the emerging smaller, smarter home market.

Winter said the Freedom Series homes range in price from about $200,000 to about $350,000, depending on upgrades and extras. But energy efficient features are not considered “extras.”

“All of our models are Energy Star inspected and certified,” he said.

Generally such homes include additional energy-saving features that make them at least 15 percent more efficient than standard homes.

So how are buyers responding to new, more energy efficient options?

Like Weets, Winter sees big marketing advantages to at least offering upgraded windows, solar-ready wiring and Energy Star appliances.

“They may not always be able to afford to go green, but we make that option available along with our Classic Secure job loss protection program,” he said, adding that the company hopes to sell between 250 and 300 new homes by year end — a respectable total during a year when total El Paso County new home sales might reach only 1,000 units.

“I really wonder what’s going to happen to all the McMansions that are for sale out there. There could be some real changes in the next five to 10 years,” Winter said. “I saw an article in The Futurist about the shift away from big houses. People used to buy a McMansion, thinking they could live in it, watch it appreciate and it would be their retirement savings plan. I’m not sure that’s viable today.”

So, are buyers buying all the green and sustainable features the builders are building?

It appears some are biting, but not all. While price is the biggest issue, among younger, well-educated buyers, green is good.

Houston Realtor Erik Fowler, in a report published on the National Association of Realtors Web site, described his experience working with buyers interested in a sustainable product.

Among them were the following sub-groups:

Economizers: Looking for well-insulated homes and Energy Star (or better) energy performance.

Investors: Want to know what rating system was used and how maintenance will be reduced.

Health-conscious: Looking for low-VOC (volatile organic compound) paints and formaldehyde-free adhesives used in carpets and wood.

Idealists or eco-conscious: Want to feel like they are reducing their impact on the environment.

Image-oriented: Seek to make a statement and demand a reputable rating system or perhaps solar panels to show off their choices.

Skeptics: Require proof of claims or simply be unaware of the benefits of green built homes.

Closer to home, broker Stuart Scott of ERA Shields Real Estate sees increasing interest, even from higher-income buyers, in smaller, smarter homes with upgraded insulation, heating and cooling systems, and Energy Star appliances.

“I’ve worked with a lot of million dollar home customers over the years, but just this week, I had a client from Texas interested in finding a lot in the southwest part of town where he could build a 2,700-square-foot home,” Scott said. “He could have afforded a lot more, but that’s not what he wanted. I think the move to smaller homes is growing.”

He said the change is not just because of the cost of a house, but the money it takes to maintain or pay utilities bills on a 5,000- or 10,000-square-foot residence.

“Instead of conspicuous consumption, now people are thinking, ‘maybe we shouldn’t have a million dollar mortgage.’ But you watch — it will swing back in full force,” Scott said. “They’ll live in those smaller houses, save their money, and say, ‘wouldn’t it be great to move back into a bigger house again.’ For now, though, a lot of buyers are looking at a less expensive, smaller place.”