Will big homes go out of style here?

[Bugs]

I’ve been kicking around a few thoughts lately about the rise of bling in our society. The average house built in the 1950s was around 1,000 SqFt or so. The average home in the 1970s was under 2,000 SqFt. We started out in this economic swing building 3,000 SqFt tract homes and now we’re up to 4,500 – 5,500 SqFt tract homes. Likewise, the rise of the H2 and the Escalades as the urban assault vehicles of choice.

If the housing market returns to trend as some of us believe, I wonder if the resulting losses will trigger a backlash against bling. Will the losses promote lowered expectations and a willingness to scale back the McMansions or are the masses all going to continue to want to be the Baller-Shot Caller in their ‘hoods?

[an]

With an increase in energy cost, I would think people will start to scale back once they can’t count on their house ATM anymore. Once people have to live w/in their mean, it would be very hard to pay for the utility and fill up a McMansion.

[speaker]

I have been wondering the same thing. People have been crying about the price of gasoline for some time but wait until they have to pay the energy bill after a heat wave. On a side note….listening to people whine about the price of gas is akin to listening to people whine about politics when they don’t vote.

The first time I visited my friend in his McMansion, I couldn’t get over how much dead space there was throughout the house. Vaulted ceilings may look nice but the cost of energy to maintain a constant temperature must be horrific.

Salaries aren’t going up much but the price of gasoline and energy seem to have volatile ceilings and with inflation looming and rising interest rates to fight inflation…..anyone else here seeing a wicked negative feedback loop?

“End of line.”

[Bugs]

I wonder if a meltdown in the RE market would have an effect on the expectations of the following generation? In the current environment, a young wage earner has no expectation of being able to afford the type of houses their parents are buying right now. The point of entry is just too high and other demands are being made on their income that the parents didn’t have to deal with.

The young adults I run into seem to have different priorities. Several of them have commented that they could be perfectly happy with the smaller house so long as they could keep the big truck. I’m sure those priorities will evolve as they rack up more responsibilities, but I wonder if the design trends pushing for high-style in smaller areas might take root, in part as a reaction to the excesses of this decade.

Remember the cars of the 1960s? We started out the decade with big fins and massive grills and by the time 1973 rolled around everyone was trying to jam into a 4-cylinder Japanese car. Some of it was energy costs, but I think some of it was backlash, too. It seems like the masses will follow a trend to it’s extreme and then when it becomes too much they reverse course.

Just musing.

[lindismith]

Those are interesting questions about bling, Bugs. I think during prosperous times, yes (like the ’80s) it was the fashion to look prosperous, but then when we had the recession in the early ’90s, the Grunge look was in. Fashion does change, but the problem with a big house is that it can’t really change. It has to stay as big as it is.

I do know that the pre-fab market for houses has gained a little traction during this housing prosperity period because they are a pretty cheap alternative for buyers, and they are generally smaller. There is an awesome magazine called “Dwell” about the whole pre-fab market. The prefabs that tend to be gaining the most ground are the ones that take a modular approach – start small, and then as your family grows, buy another modular component, and add on. They’re pretty cool.

I think the other trend we’ll see going forward is more customization by builders on tract developments. One of the big problems with tracts is that one house doesn’t differ from the next. So, successful builders, or at least ones that want to stay in business, will be forced to offer more differentiation. Maybe going smaller will be one option? There are plenty of single people (or people without kids) that want a house, but don’t need a huge one, and something smaller in a nice development would allow for more potential buyers.

[mixxalot]

Trend for smaller homes and single people.

I agree. Personally I could get by with a nice 2 bedroom/2bath home as long as a decent size garage and yard are available. The problem in San Diego with homes that I see is tiny or non-existent garages and no yard. For me, I would prefer a smaller home with a medium yard and large garage. But I dont want to spend half a million dollars for a small home either. Personally, homes should cost at most 200k unless the place is an estate. I wonder if San Diego homes will ever go down that low. I still do not understand how people can afford to shell out 4-8k a month for a mortgage. Jobs don’t pay well in San Diego for the real estate costs.

[North County Jim]

I’m curious whether there has been any reduction in average home size in a given period since WWII. We’ve had recessions and energy shocks but were these periods accompanied by the building of smaller homes?

I suspect they weren’t (at least for SFR’s) and any future reduction would be a huge secular shift in how we live.

[Bugs]

I agree with the idea that it would represent a huge shift. I think what I’m driving at here is not so much the effect of having another downswing that costs people money, but the possibility that sooner or later an entire generation is going to come to the conclusion that bigger is not necessarily better. And one of the causes of that will probably be an RE market meltdown that hurts a lot of people.

In the last 60 years each generation has been raised to believe that they could do better than their parents. In our own generation some people have done just that, but many have not. I’m wondering if the kids today are being raised in the belief that they can also do better. Sooner or later a generation is going to start out so far behind that they’ll have no real hope of getting to where there parents are. when that happens, how will they reconcile their desire with their reality? And when a generation decides not to compete with their parents, will they change their priorities?

Social Security is in danger of collapsing before the end of the boomer generation. The kids today will have no real expectation of that entitlement. Career stability is not even in their vocabulary. Marriage today means a 66% divorce rate right from the get. There are a lot more blended families now than ever before and that pace is just picking up.

How will they reconcile their desires with their reality? Will they turn away from the consumerism and all the work and stress that go with that – which only results in frustration anyway – or will they choose a more balanced life that measures wealth by how much they spend rather than how much they make?

How big does a house have to be in order to be big enough? At what point will people no longer desire anything bigger than what their parents had? How high can the tree grow before it’s not doing anything for anyone except sucking up resources?

[North County Jim]

Bugs,

I suspect we’re thinking along similar lines here. At some point, a generation will come along (if they’re not already here) with reduced expectations.

Assuming we’re close to that time, who will drive the demand for smaller, simpler pleasures? Will it be low expectation younger people or will it be an older but wiser crowd?

[Bugs]

Good question. I notice that a lot of the drivers of the big 4×4 crew cab 1-ton pickups are kids (raltively speaking). I notice a lot of people in the 40+ age groups who aspire to gravitate away from the corporate career path in favor of a more flexible and family-oriented lifestyle, even at the expense of their bottom line.

I know I’ve phrased it this way myself (probably based on my own biases), but it occurs to me those alternate expectations may be better characterized as being “different” rather than “reduced”. All chosen lifestyles involve some level of compromise and hence carry their own stressors resulting from the downsides of that compromise. One is not more virtuous than another by right; it only becomes more or less of a conflict based on the individuals ability and willingness to live with both sides of the paths they choose. A person who struggles to deal with the downside of “settling” for less isn’t necessarily any happier than a person who has to struggle to deal with the downsides of paying to have more.

[powayseller]

Sarah Susanka’s The Not So Big House and other architecture books, carried by the major book retailers, emphasize quality over size. I used her ideas in designing my own house. She teaches how to make a house appear larger: open views from one end/corner to another, rooms differentiated by variying ceiling height instead of walls. She teaches that one space can serve several purposes: study center in dining room. Other ideas are having private spaces within a larger room by creating alcoves. You don’t need your own getaway room – you can carve yourself a small window seat in the living room, etc.

She advocates wood ceilings, timber beams, large windows, window seats, interesting roof lines, design of walkway/gate/entrance, patios. While her houses cost more per square foot, they are well designed and comfortable. I am more drawn to the quality of her house, than the big nameless McMansion, cold and lacking any imagination.

I’ve read that builders will return to crafting homes, with unique styles, to set themselves apart in this age of overbuilding.

I can certainly foresee that the next generation of homes will favor quality over size.

UPDATE: See The McMansion Glut WSJ 6/16/06

[PerryChase]

Smaller house? Never!!

Unfortunately, I don’t think this will happens for some reasons:

1. People are getting bigger by the day. They need space to fit in their overstuffed furniture. The waistline problem is a worldwide phenomemon. I love clean small designs and I can’t find any small furniture. When I do, the prices are 2 to 3 times more. I’m single and I’d love to buy a nicely designed small refrigerator — there are none.

2. Many households comprise of roomates and extended family. They need room for those people.

3. Consumer society encourage people to buy junk. People need room to store their stuff.

4. Good design and good taste are beyond most people because our educational system does not teach us to think quality. Think of all the time people spend shopping for clothes. Do they look any better because they have so many clothes? Look at most people’s bathrooms. They have bottles, decorations and junk galore.

5. Keeping up with the Jones is part of our culture. More is better. I know people who move up to bigger houses just to impress their friends. The drive to outdo each other is what makes us happy.

I’d love to be proven wrong. But I’m afraid that we won’t return to sanity anytime in my lifetime.

[Author]

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