April 29th, 2015
It’s no secret homes are more costly now than they have been in the past, and this is because the average home size has gone up. Today’s homebuyers want bigger, more extravagant homes than past generations, and this demand has pushed developers to build larger houses. As the additional square feet become the standard in many neighborhoods, the extra space propels property values.
Not only are homes getting bigger, but they’re also coming with more amenities, according to The Wall Street Journal. To complement the additional bedrooms, homebuyers want smart home features and high-end finishes.
One interesting factor about the penchant for larger homes is the average family size is smaller. However, this doesn’t mean they don’t want space to spread out.
Not your parents’ house
Home sizes have steadily increased over the years, with the typical house having more features as time went on. An animation from CNN Money visualizes this trend, showing how as the years progressed since 1970, the American home had more square feet, an additional feature or both. These extra amenities include half bathrooms, vinyl siding and gas heating.
By 2013, the average square footage for a home was 2,834, up from 1,525 square feet in 1970. While certain features, such as fireplaces, didn’t remain key amenities of homes through the years, homebuyers still sought to upgrade their space. This trend has driven up home prices, but consumers are willing to pay the cost, according to Philly.com.
Builders are only going big
The trend may have a noticeable impact on first-time homebuyers who are looking into new properties. Traditionally, these consumers seek existing homes for their first houses, but a few want to purchase a new home instead. If prices for new properties continue to rise, first-timers may have fewer options in the new-home market.
This challenge could become more prevalent as builders focus on only larger houses. To meet the greater demand, developers devote more of their resources to building a smaller quantity of bigger properties. While they have a reduced inventory for sale, the premium sale price that comes with the size and amenities of today’s homes more than make up for the limited audience.
Many builders believe there is no longer a market for entry-level new homes. Additionally, even when developers build these properties, they don’t sell fast, indicating first-timers continue to find more homes that fit their needs in the existing market.