Average New Home Sizes Drop – Good News for Real Estate

An interesting result of the Recession was a distinct division of home buyer types which resulted in a housing trend that is beginning to “correct itself.”  During the Recession, the housing market experienced an increase in the average square footage of homes because more established households were able to spend money and build semi-custom and fully custom homes for themselves that inevitably had more square footage than normal homes in a healthy real estate market.  The reason for this is because these solid households tended to have high equity and strong household wealth numbers and were able to continue to live and spend as they always had while still being conservative because of the economy.

These households come to the forefront in statistics during the Recession because their spending habits and building habits were the only ones that could be scrutinized.  In a normal market, first-time home buyers would make up a large chunk of the market and middle class (2nd and 3rd time home buyers) would make up another substantial portion of the home buying industry as well.  These two sectors of real estate would keep average home sizes smaller than custom home buyers and builders because they would not have carte blanche when it came to a borrowing or financing budget to build their new home.

Because of this unique situation that hasn’t been seen in many years, the average size of a custom, single-family home during the Recession rose to 2,651 and the overall median rose to 2,472.  According to Census Quarterly Starts and Completions by Purpose and Design and National Association of Home Builders (NAHB) analysis of the 3rd quarter of 2014, these numbers have dropped from 2,651 to 2,601 and from 2,472 to 2,414.  This is actually good news for the housing market because it means that lower income home buyers are entering and building / buying homes again.  For a real estate market to survive and thrive, it must have all types of buyers because, like a mutual fund, it has compounded returns on investment when first-time home buyers become second and third-time home buyers.

At Bedico Creek Preserve in St. Tammany Parish, we offer a total of 7 Neighborhoods which offer a variety of lot sizes and home sizes for every type of buyer imaginable.  If you can design it, one of our 17 builders can build it!  Visit our new home community in Madisonville, Louisiana today to learn more about our lots for sale and tour our new homes for sale.  Call 985-845-4200 or E-mail [email protected].

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