“Big house on little loooooot…”
Okay, so Chris Farley probably wasn’t much for gauging the real estate industry, but his famous moment in Tommy Boy sort of applies to a recent trend in recent new-home construction. According to the multiple sources, they’re getting bigger and more expensive, while the lots they sit on are getting smaller.
Zillow has a helpful post outlining the trend, which is just that – a trend. Much of the country, including most of the high-priced spots in New England and the west coast, have seen little growth in lot size OR home size since the late 1990s. Another strip, from the Mississippi/Alabama coast up through Michigan, have seen lots sizes AND home sizes increase. But another chunk, including parts of the southwest and the Middle Atlantic seaboard down through Florida, have been trending toward larger houses on smaller lots.
The National Association of Realtors also recognizes the trend in a recent article.
Some of the increase is due to builders catering more to the luxury market and moving away from building homes for first-time buyers. “They haven’t made more starter homes in recent years mainly because of land prices, construction costs, and lack of available mortgages for less-affluent buyers,” The Wall Street Journal reports. First-time home buyers tend to bring the average size of new homes down since they tend to live in smaller homes than move-up buyers.
Some other interesting tidbits from the NAR post:
- The average new home was 2,720 square feet up nearly 400 sq. feet from the 2008 financial crisis.
- 25 percent of homes have garages built to hold three-plus cars.
- Half of homes constructed in 2015 had four or more bedrooms.
- The average price of a new home was $351,000… up $100,000 since 2009.
The upshot, according to an article from the Wall Street Journal, prices are going up, as well, making new construction less accessible for first-time homeowners. (Story is paywall protected.)