Are Albemarle and Charlottesville Home Sizes Declining?

There’s been a lot of buzz resulting from Trulia’s most recent article about the ‘McMansion Era’ ending.  Studies are showing that Americans are wanting smaller homes.  The report states that only 9% of Americans want a home more than 3200 square feet.  There’s two factors behind this:

1. The Green Movement: the big push for energy efficiency and ‘green-built’ homes has caused homebuyers to think twice about how much space they actually need.  At Nest, we hear it every day: do I really want to heat and cool this extra space? With rising energy costs, buyers are very cognizant of the ongoing maintenance costs of the homes they live in.

2. The Market.  Yeah, we know, the market isn’t great.  Anytime you have a major shift in the economy, people take a step back and re-evaluate their needs.  In this case, homebuyers are looking for ways to put less into housing…and the first place to look is moving into a home that is smaller and more efficiently laid out. Back in the 1990s, a big house was a status symbol…not so much now.  We all agree that no one really needs a 10,000 square foot house – but that’s the anomaly.  The big changes are taking place in the cases where a buyer is choosing a 2700 square foot home over a 3200 foot home – maybe that extra bonus space and that 5th bedroom just aren’t that important.

If you are a homebuyer, here’s a thought process to consider: In this example, let’s say that you are looking at homes in the $125/sf price range.  The difference between a 3200 square foot home and a 2700 square foot home could be in the $50,000 – $60,000 range.  That’s a lot of dough.  So, you need to think hard about whether you need 5 bedrooms and an office or if you can be creative with a little less space.

The idea of using space creatively started to catch steam a few years back with Sarah Susanka’s The Not So Big House philosophy.  Honestly, we haven’t seen much of those ideas used in this area with ‘spec’ houses.  Especially in today’s market, builders aren’t willing to take major risks on floor plan layouts.  Most of the builders are still trying to appeal to the masses…but I think there is an opportunity (and so does Trulia) for a builder to step into the market with a different type of product.

Locally, we haven’t seen a major drop in home sizes.  We’ve taken the average home built in Charlottesville and Albemarle over the last 8 years to create the following chart:

2003: 2469 sf

2004: 2804 sf

2005: 2873 sf

2006: 2813 sf

2007: 2923 sf

2008: 2755 sf

2009: 2645 sf

2010: 2862 sf

As you see, there was a downward trend in size over the last few years…until we get to 2010.  However, the sample size in 2010 is so small that it may not be a great representation.  We’ll be sure to re-visit this at the end of the year to see what happens with the 2010 number.