All this is causing builders to redraw their blueprints. After reducing prices on their current inventories of unsold homes, the next step is to "start building to a new market. That new market is a lower price point at a smaller size. To the extent they can do it, they will," said Kermit Baker, chief economist at the American Institute of Architects.
Over the past three decades, prosperity and a demand for space to accommodate home theaters, offices, gyms and palatial kitchens has pushed up the average size of newly constructed single-family homes by nearly 45% even as the size of the average family has declined. Last year, according to the Census Bureau, the median size of a newly completed single-family home reached 2,248 square feet, up from 1,560 square feet in 1974.
The expansion continued into the first quarter of this year, with the median home size inching up to a near-record 2,302 square feet. But it slipped to 2,241 square feet in the second quarter, and many analysts think a broader decline may be in the offing.
Jeffrey Mezger, chief executive of Los Angeles-based KB Home, said the change has been "driven by data on what our home buyers want and what they can afford in a new home." Mr. Mezger estimates that the average size of a newly built KB Home today is 2,200 square feet, 200 square feet less than before the shift in sentiment took hold
10% reduction in size, leads to 10% reuction in cost/price,
and in Florida?
David Raidman, 37 years old, moved into his 2,760-square-foot lake-front home in Fort Pierce, Fla., last fall in the first phase of a gated community developed by Lennar Corp. of Miami. Mr. Raidman said he was told that his home would be surrounded by similarly sized and priced homes. But when he heard Lennar was planning to build much smaller homes in his neighborhood, he and other homeowners fought the company's plans.
Although Lennar agreed not to build the smallest of its new models -- at just 1,326 square feet -- next to the larger ones, the home builder has continued with its plans to downsize.