I agree with AN – there will be a surplus of the 2500sf+ houses for a while. There is already a demand for the smaller, more affordable housing. Which is why anything under $300k gets snatched up.
I can see a developer doing a dense build of smaller houses on smaller lots – 1500 sf house on 3500 sf lot. Yes, the ppsf would be higher than the 4500 sf McMansion, but it would still price out at a spot where more middle class people could afford it… without the creative financing.
But – it would require people getting over their sense of entitlement that they deserve a starter home in a new development that is 2500sf and bigger. This recession and the collapse of the bubble might be doing it’s part to adjust that feeling of entitlement.
