The Downsizing Boom

Posted on Sep 27 2010 - 11:54pm by Winnie Hsiu

For years, Americans were famous for building McMansions — adding every bit of space possible to new homes. Home builders were adding rooms for home theaters, game rooms, exercise rooms, interior greenhouses, and even separate children’s and guest wings. But according to a survey conducted this year by the American Institute of Architects, that trend has come to an end. Instead of living large, Americans have begun to downsize — putting items in storage if necessary to make it possible to live in a smaller space. Industry analysts say that the new trend will mean more business for professional organizers, interior designers, home furnishing stores, and self storage companies, as Americans try to figure out how to maintain their old lifestyles in less space.

According to the American Institute of Architects, the three rooms that families today are likely to add to a house plan are home offices, mud rooms, and closets. There is also a high demand for plenty of outdoor living space — space that does not have to be heated or cooled.

While many people are downsizing for economic reasons, others are downsizing because of a deeply felt commitment to environmental issues. Those two concerns tend to go hand in hand — the same two groups of people ask for the same adjustments in their house plans. Both want compact homes. Both want their homes constructed out of recycled and/or renewable materials. And both want homes that conserve energy efficiently, using plenty of insulation, double- and triple-glazed windows, thermostats that can be programmed to reduce energy use, tankless water heaters, geothermal heat pump technology, and if possible, solar collectors.

Homeowners are also looking for one feature that is not necessarily related to sustainable living — back up generators. Increasing numbers of power outages have made some families leery of relying totally on the public electric grid for power.

Another factor in the downward trend is age, as baby boomers get older, retire, and transition to smaller homes.

Whatever the reason, though, the trend is definitely downward, toward smaller homes and lower home values. Since 2007, the median home size has dropped six percent. According to the Association of Home Builders (AHB), the median square footage of new homes has dropped from 2,309 square feet in the first quarter of 2007 to 2,169 square feet in the second quarter of 2010. In a recent survey of the AHB’s membership, about 95 percent of builders said that their clients were asking for smaller, less expensive homes.

“Most people aren’t buying these Dallas-size houses anymore,” broker Colleen Cotter, of Keller Williams Realty, told Sign On San Diego over the weekend. “They have to short-sell the big place they’ve got, and they have to rent or buy a small place in the interim.”

Since the things that were stored in older, larger homes have to go someplace, self storage occupancy rates are going up. San Diego area self storage manager Chris Meehan, of Solana Beach Self Storage and Morena Self Storage, says that occupancy at his facility has grown from 82 percent in January to 90 percent today.

Sources used:

Lewis, Roger. “Architects survey reveals growing desire to downsize and green up.” The Washington Post. Sept. 25, 2010.

Mannes, Tanya. “Downsizing is booming.” Sign On San Diego. Sept. 25, 2010.