This week, a USA Today article noted that median home size peaked at 2,300 square feet prior to the recession, and is now 2,100 square feet.
- Big rooms are in and formal living rooms are out
- Front porches are back (effective outdoor living space at minimal cost)
- Smaller lawns (read that as less to grow—less to mow)
- Green is in (not the lawn—but reduced energy usage)
Are people buying smaller because of choice or necessity (they qualify for less, as well as financial uncertainty)? We believe that the bigger story is the migration to live with less sq footage, closer in. Outer rim communities will have less success, unless work, play and convenience are nearby. We are seeing attitudinal changes under 35:
The Facebook generation wants to live and work with friends – keep costs down/keep those college years alive as long as possible, which means co-habitation in apartments/single family rentals well into their late 20s and early 30s.
Student loans and ease of getting credit cards – the securitization market made it easier to fund “higher risk” credit, therefore the preponderance of easy debt placed on those under 30 is greater than ever before in our history.
Distrust Of The Housing Market
Generation X and Y, Echo boomers have watched their parents retirement funds, wrapped in home equity and second homes, blown away by the housing crash.
Birthrates and Marriage Rates
These latter generations are getting married later in life, having fewer kids, and divorcing more frequently. This means less demand for homes over time.
Great news for Austin/Texas, not so much for the rest of the country. The internet, the tax burden in their state, intellectual capital, etc. all are factors in attracting 25+ million people to 4 cities in Texas in the next 20 years.