Ok, full disclosure here. I have a new secret vice. I’m addicted to “Tiny House Nation”, The new interest in going small is a refreshing switch from the bigger, badder, better trend that dominated until 2008 financial crisis.
However, when it comes to housing choices, buyers and sellers really need to think beyond what seems to be the latest “thing” and differentiate between short-term fads and long-term trends. A home is an enormous investment and you don’t want yours looking like a pet rock 10 years down the road.
Although there are no guarantees, trying to distinguish the flash in the pan is often just a study in common sense.
Since 1950, home sizes have been expanding. The average house in 1950 was a hair under 1000sf (983 sf). Since that time the average home size has increased dramatically. According to the National Association of Home Builders, the average home size is now 2720 sf.
The origins of a trend…
This was obviously a long-term trend which lasted many decades and almost 3 generations. If you had bought into this trend in 1960 by purchasing a 2000 sf home, you would be amply rewarded today. The trend happened because the post-war era was a time of unprecedented growth for the middle class, transportation to suburban areas surrounding cities had become easy, and land was plentiful.
The unwinding of a long-term trend…
Even long-term trends end eventually. Bigger, better, badder and more expensive is eventually going to morph into just plain unsustainable.
In this case, the McMansion phase where families of three were rattling around in 6000sf homes combined with the worst financial crisis since the Great Depression to put an end to the “bigger is better” craze. For all but the 1%, bigger was no longer affordable.
The great contraction…
The economic crisis sent rental and purchasing prices downward. Almost overnight, places like Manhattan and Brooklyn were more affordable than they had been in years.
In part because the city was more accessible, sales in even close-in areas to NYC slumped while more people decided they wanted to live in the city.
This wasn’t truly sustainable either. As people flowed in, prices and rents went up. Those who didn’t take that split-second opportunity to buy are now being priced out of the city and looking again to outlying areas like Queens and Westchester.
We are now in a new expansion where even diehard city dwellers are rediscovering easily accessible suburban enclaves. Here are some trends that we are seeing or likely will see going forward.
Trend: Suburbia is selling…
It’s been a long dark winter for the suburban market. But suburbia is back. This push forward is coming from millennials that are finally having families as well as a mass exit from overpriced cities.
Trend: Smaller homes, more convenience…
Although the suburban trend is strong, it is limited in scope. A home in close-in neighborhood with easy public transportation or walkability to a handy Metro-North station is pure gold. A larger home in a quiet but car-dependent area with rolling lawns, large lot sizes and no place to go on foot, not so much.
People can’t seem to get enough of them and the demand is by far outstripping the supply. They give owners a house-like feel and the benefits of ownership while relieving the owner of high-ticket exterior maintenance including landscaping.
Fad: Tiny homes…
Like I said, I’m addicted to Tiny House Nation…but really, I’ve seen programs where they are stuffing a family of 5 into a 300sf “house”. Seriously? SERIOUSLY? 200-300 sf for 2 or more people where the sleeping area is a loft of 3 ft in height?
At best such an arrangement is a self-induced form of purgatory; at worst, it’s a potentially dangerous experiment in territoriality. Great for divorce lawyers, but for future resale, I wouldn’t count on it.
Possible Trend: Small homes…
Now, a single person in 500 sf or maybe a couple in a 800sf small house is something I could see. Given where prices are going, this actually makes good economic sense as long as the space is used efficiently and the overhead makes sense. In fact, this could be the next long-term trend. But we are talking small house, not tiny house.
No one has a crystal ball. But if you are looking at where you are living now and trying to anticipate what future demand might be, you need to do two things:
Remember that what worked for the boomers/Xers may not work for the millennial generation who are today’s home buyers.
For more information about what neighborhoods can do about changing trends, read Trend vs. Fad Part 2.
© 2016 – Ruthmarie G. Hicks – https://thewestchesterview.com – All rights reserved.
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