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Smaller homes become more popular
17 Dec, 2009 LDB SolutionsThe year is closing with a glimmer of economic hope.
Nationwide housing production rose 8.9% to a seasonally adjusted annual rate of 574,000 units in November, according to figures released by the U.S. Commerce Department. The gain represented a partial bounce-back from an exceptionally slow month for housing activity in October.
Gains in housing production were registered across all regions of the country in November, with a 16.4% increase in the Northeast, a 3% gain in the Midwest, a 12.3% increase in the South and a nearly 2% gain in the West.
Permit issuance, which can be an indicator of future building activity, rose 6 percent in November to a seasonally adjusted annual rate of 584,000 units, its highest level in a year. Single-family permits rose 5.3 percent to 473,000 units, while multifamily permits rose 8.8 percent to 111,000 units.
“The fact that both starts and permits for new housing production rose last month is a good sign that we’re headed in the right direction, albeit slowly, on the road to a housing recovery,” said Joe Robson, chairman of the National Association of Home Builders (NAHB) and a home builder from Tulsa, OK. “That said, the November improvement was primarily on the multifamily side, and poor job markets and other economic factors are still keeping many potential buyers on the fence for the time being.”
According to an article in USA Today, some of the uptick in new home starts could be coming from smaller homes. The article cites NAHB statistics that show the median square footage of new homes has dropped 9% from a peak of 2,300 sq. ft. in the third quarter of 2006 to 2,100 sq. ft. in the July-September period this year.
It is not unusual for housing sizes to drop during recessions, but the recent decline in the housing market was so severe that many expect the trend toward smaller homes to continue. First-time buyers cannot afford larger homes, and larger home owners are not able to find buyers.
What does this mean for landscape design-build professionals? While smaller homes may equal less investment in landscapes, that may not always be the case. Smaller homes mean less profits for home builders, who may drop landscaping upgrades that homeowners may want later, such as large porches, decks, trees and flower beds. Current homeowners without enough equity in their homes to sell might be convinced to stay and invest in their outdoor living spaces.
Keep an eye on housing trends as you prepare for 2010.
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