We were intrigued as new data on new home size trends came to light from the National Association of Home Builders economics department's Rose Quint in the past few days. Data like this is going to be the talk of the town among multifamily leaders of all stripes, because it raises an important set of caveats about one of the biggest assumptions in housing right now.
Small is the future.
But is it?
After a barrage of headlines--fueled by architects, community planners, experts on "the generations," and trend-meisters--that heralded the advent of a sustaining future for smaller dwellings by choice, financial disposition, and location here's the main conclusion of the NAHB's latest drill on square footage trends:
· Average size rose to 2,522 square feet, up 6% from 2,381 square feet in 2010.
· The share with 4 or more bedrooms rose to 42%, up from 36% in 2010.
· The share with 3 full bathrooms or more jumped to 28%, up from 23% in 2010.
· The share with a finished basement jumped to 30%, up from 25% in 2010 (basement counts towards total square footage only if finished by the builder).
· The share with a 3-car garage or more reversed a six year trend, rising to 18% from 16% in 2010.
· The average sales price of homes started for-sale rose to $274,400, up from $264,900 in 2010.
The issue here, as the NAHB's Quint explains, is not that the futurists and planners are all wrong in their prognostications that smaller homes are what people want, can afford, and can get to conveniently. It's that in a low-transaction marketplace, the most of the people who are buying new homes these days happen to be people with more discretionary resources. They're wealthier. They can get loans. They can part with whatever property they currently own, and not get too anxious if it's not the market price they'd once imagined.
It's they who want bigger places.
Not the rest of us.
However, before get entirely comfortable that our assumptions are entirely based on a vision for living that genuine people genuinely embrace, we should take care to reality check, even stress test these assumptions.
As recently as November, Multifamily Executive's Les Shaver discussed the issue with KTGY principal Manny Gonzalez.
The Multifamily Executive team has written several other analyses that focus on the "smaller" trend in apartment development, here, and here, and here. We'd like to get your comments on whether the market's actual dynamics have begun to support all this theory that small units are where it's at, because there's an awful lot of stakeholder money betting right now that that's the case.