My parents have a big house. I don’t want anything to do with it—and neither do they. Turns out this is pretty typical.
Nothing to do with affordability: my wife and I have the money, as do my parents, but it’s a little too much house at 2,400 ft2. So it comes as a surprise to see that it’s small by today’s standards: the size of new builds are now at record highs, averaging over 2,700 square feet: about 1,000 square feet larger than homes built about forty years ago.
So who’s buying these houses? Apparently for the most part, people entering a world of regret.
A Trulia survey found that of those living in the largest homes (larger than 2,000 sq2) more would like to downsize than upsize if they had to move in a year. And what’s even more funny (if not for the suffocating debt) categorically the bigger the home, the more their owners want to downsize.
So basically those with smaller homes want larger ones, but once they get over 2,000 sq2, more often than not they regret it.
To be clear, this isn’t a long term desire: these people wanna move soon. And looking ten years down the road, people really know they want out: the percentages only go up when looking further into the horizon.
Feels like a miserable climb up Everest only for these people to realize the view sucks, then perilously try to find a way back out. Closing costs, increased loan interest, insurance and utility bills—on top of being on the hook for increased property taxes as unsustainable municipal budgets implode. Sky’s the limit.
These new homes being built now surpass the pre-recession monsters. Not so long ago in 2011, just 6% wanted a super-sized home (3,200+ sq. ft.) but that fear is long gone–because the recession was just a fluke and will never happen again, right?
The future market is questionable. In ten years, who will still be clamoring for McMansions? With baby boomers dying off and downsizing, it’s basically up to Millenials to fill the gap, but even if job prospects improve where’s the desire to fill these houses—even if they decide to finally marry and have kids. School systems are important and big houses will always have appeal, but 2,700 sq2 could be more room and less freedom than Millienials are ready to sign up for.
So save yourself the climb. I hear the view from Everest is pretty crappy this time of year.
References:
https://www.trulia.com/blog/trends/home-size-survey-march-16/
https://www.trulia.com/blog/trends/trulia-american-dream-survey/
