To Fight Costs, Builders Opt for More Modest Size Homes

One noticeable effect of the housing market crisis is a surplus of unpurchased new homes. Another interesting effect that is less noticeable but just as relevant is a decline in large homes leading to a greater ratio of modest-sized homes to overall new homes.

Old Housing Trend -- Supersize

When the housing market was strong and there was plenty of money in it, the trend was to build larger “super-sized” homes. With assurances of homes being in demand and would sell, builders happily created giant homes that they knew they could sell for bigger margins.

New Housing Trend -- Modest Size

Now that the market is on the decline, builders are looking for ways to cut costs, and one way to do that is to build smaller homes. Less square footage means fewer building materials, which means lower costs.

What the Modest Size Housing Trend Means for the Future

Shrinking homes is not necessarily a bad sign. Smaller homes are more affordable, meaning when people are ready to dive back into the real estate game, they will have a place to turn. An excess of extra-large homes that few people are able to afford would most likely stall the recovery even further.

That is not to say that those who can afford and are seeking super-sized homes have no options. There are plenty of these homes still available for those whose income makes it possible to own them.

Handling the Modest Size Housing Trend as an Investor

Real estate speculators should look at the downsizing of homes as an opportunity, not an obstacle. It is a buyer’s market, and housing prices cannot stay down forever. Researching and pursuing modest-size home opportunities right now just might be a great way to see big profits down the road when the market rebounds and homes begin to appreciate more consistently again.