The urge to downsize the home seems to be subsiding.
The average size of a new home built in 2013 in the Triangle went from 2,379 square feet in 2005 to 2,526 square feet in 2013, according to a report by residential research firm Metrostudy, and it’s a trend that’s backed up by what’s happening nationally, as well.
“Remember how all the headlines just a couple of years ago were about how new homes were getting smaller, and how micro housing was going to take over and nobody would buy larger houses, while Metrostudy kept seeing the opposite,” saysJay Colvin, director of Metrostudy’s Triangle and Triad regions.
Colvin’s research shows that the average new home price in the Triangle may have dropped 9 percent to $264,570 in 2009 from $290,018 in 2008, but the average square footage from a new home dropped only 3 percent.
“It was a buyers’ market, so they negotiated price down, but bought essentially the same homes,” Colvin says.
Increasingly in recent months, he says, builders in the Triangle have seen buyers making up for lost time. Young buyers are skipping the starter home and going straight from renting an apartment into a larger, move-up type home.
Retirees are demanding more square footage, as well, even as they are downsizing. “We’ve increasingly seen move down buyers, buy larger homes,” Colvin says. He notes that at Carolina Arbors, the Del Webb active adult community in Durham, the average base floor plan is 1,828 square feet, and all four of the floor plans they offer are larger than the largest plan that Del Webb had offered at Carolina Preserve, its previous active adult community in Cary.
Economics have a lot to do with the shift to larger home sizes. Homebuyers typically buy as much home as they can afford, which is influenced by interest rates, household income and credit scores, and affluent buyers have been more numerous in the market.
Nationally, the share of new homes with at least four bedrooms has also been on an upward trend, rising from 34 percent in 2009 to 48 percent last year, according to the National Association of Home Builders.
The median income of new-home buyers has climbed from $91,768 in 2005 to $107,607 in 2011, and during the same period the number of new home sales has dramatically declined, from 1.28 million to 306,000.
“There are not as many people who have the income that can qualify for a new home,” says Rose Quint, NAHB assistant vice president for survey research. In North Carolina, Colvin points out that the unemployment rate for young adults between ages 20 and 25 is more than 12 percent. “So there is a big pool of young people still in college, living with parents, and renting who are waiting for employment” and to buy a home, Colvin says. “I believe, once they do find jobs, you’ll see historical trends in life event changes resume and the Triangle will see smaller lower priced homes reemerge as influencers in market dynamics.”
Amanda Jones Hoyle covers commercial and residential real estate for the Triangle Business Journal. Follow her on Twitter @TBJrealestate