Home sizes shrinking as nation tightens spending

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Smaller homes with fewer bedrooms and bathrooms may be fine in a tight economy, but bigger isn’t going out of style any time soon.

That was Classic Homes’ President Joe Loidolt’s reaction to just-out National Association of Home Builders’ study that said homes built in 2009 were almost 100 square feet smaller than those completed in 2008.

The nationwide average size of new single-family homes declined last year to an average of 2,438 square feet, based on 2009 U.S. Census Bureau data.

After increasing steadily for nearly three decades, the average single-family home completed in the United States peaked at 2,521 square feet in 2007, remained flat through 2008 and dropped in 2009.

In keeping with their slightly smaller size and typically lower price points, homes are coming with fewer bedrooms and bathrooms.

After increasing for 20 years, for example, the proportion of single-family homes with four bedrooms or more topped out at 39 percent in 2005; it was 34 percent last year.

At the same time, three-bedroom homes grew more popular, increasing from 49 percent to 53 percent of all new homes completed between 2005 and 2009, the NAHB reported.

And the number of houses with three or more bathrooms declined last year to 24 percent from a peak of 28 percent in both 2007 and 2008.

“I don’t disagree with the NAHB’s findings, but I think they were skewed. The data is based on what the average American is buying — and during the past two years, those have mostly been first-time home buyers who may be limited by what they can afford,” Loidolt said.

He’s probably right.

In a soft market, powered by programs like the now-expired Home Buyer Tax Credit, the smaller-home group has accounted for close 90 percent of all buyers, according to local real estate brokers.

Classic and other local home builders like Challenger Homes, Oakwood Homes, Journey Homes and St. Aubyn Homes have scaled their product lines to fit tighter budgets.

Of its Banning Lewis Ranch “Freedom Collection,” for example, many Classic floor plans are single-level designs that start at or near $200,000.

“We’ve always sold a fair amount of single story over two-story. Most buyers seem to be looking for ranchers — whether they’re first-time buyers or downsizers,” he said.

The group’s chief economist, David Crowe, sees the decline in the size of new homes as similar to the one that accompanied the recession of the early 1980s, with some caveats.

“The decline of the early 1980s turned out to be temporary,” he said, “but this time (it’s) related to phenomena such as an increased share of first-time home buyers, a desire to keep energy costs down, smaller amounts of equity in existing homes to roll into the next home, tighter credit standards and less focus on the investment component of buying a home.”

Many of these trends are likely to persist and continue affecting the new-home market for an extended period, he said.

Regional tastes vary

In a regional comparison, the NAHB study also looked at the number of garages today’s new-home buyers are willing to pay for.

Nationwide, 62 percent of new single-family homes built in 2009 had two-car garages, and 17 percent had garages for three or more cars. However, there were clear regional differences. Three-car garages were found in only about 11 percent of homes in the Northeast and the South. In the Midwest, 30 percent of all homes had three-car garages, and in the sprawling West, 26 percent.

Differences also were “especially pronounced” in the selection of exterior wall material, said NAHB Chief Economist David Crowe.

Nationwide, 34 percent of all single-family homes completed in 2009 homes had vinyl siding, 23 percent were brick, 19 percent were stucco, and 13 percent had fiber-cement siding.

Coloradoans, like 24 percent of their neighbors in the West, favored a few new exterior materials such as fiber-cement siding. Overall, however, stucco and wood accounted for the majority of the region’s new-home construction.

Carpe diem

Some commercial tenants are seizing the day, signing mid-to long-term leases at attractive rates. Mission Foods, for example, just signed a build-to-suit lease for 7,200 square feet at 3715 Mark Dabling Blvd. in a building owned by investors at M&M ‘03 LLC (including local businessmen Chuck Murphy and attorney Steve Mullens). Lloyd Riphenburg of Olive Real Estate Group represented the new tenant. Mission Foods expects to move into the renovated space by November.

Maximum, not minimum

Operation 6035 is seeking a maximum contribution of $1,000 from any single company or individual, not a minimum of $1,000, as incorrectly reported in this space last week.

Becky Hurley can be reached at becky.hurley@csbj.com or 719-329-5235. Friend her on Facebook.