Those sprawling 10,000-square-foot monster homes that began to be shoehorned into upscale neighborhoods across the country in the late 1980s may finally be losing ground in the luxury home market.
The latest Design Trends Survey by the American Institute of Architects, comparing home layout and use in the first quarter of 2007 with survey results from 2006, indicates that, for the first time in three years, luxury homes are starting to decrease, rather than increase, in size.
It should be no surprise that the average American home size may have reached a tipping point. Over the past 50 years, the size of an average home has more than doubled. Many of today’s new homes are being built with living rooms that are rarely lived in, dining rooms where few meals are ever served and guest bathrooms featuring tubs that are seldom bathed in. And the cost of maintaining so much unused space has been rising rapidly.
The trend to more modestly scaled homes may be the result of several factors coming together:
Increasing energy costs. In recent years, the escalating cost of electricity and natural gas has made it far more expensive to maintain a large home.
Changing demographics. As an increasing number of baby boomers become empty nesters, the largest American demographic has a declining need for bigger, family-size homes. Also, boomers building homes for retirement tend to want easily accessible homes of a more manageable size.
Shifting values. Among those who can afford to go big, REALTORS® have been noting a shift towards going for quality over quantity. Today’s buyers are more likely to put their money into expensive upgrades rather than additional square footage. They’re looking for smaller homes with many fine details such as quality woodwork and tiling.
Resale market. With today’s slower housing market, some buyers worry that a jumbo-size home may be more difficult to sell in the future. There’s concern that if they invest too substantial an amount in a large home, it may become more difficult to recoup their investment.
Of course, no one can predict for certain what the future will bring for the real estate market. And there will always be a segment of the population looking to buy a large home to support a desired lifestyle. However, depending on the current size of your home, if you’re thinking of a renovation with an eye on resale, you might be wise to consider an upgrade rather than an expansion.