California may be a trendsetter yet again.  Recently I read an article where KB Homes (the builder that Martha Stewart partners with) has started building smaller, single-level homes.  It sounds as if it is partly because of the current state of our economy.  I hope other builders, however, will pick up on this as well.

I’ve read that the Street of Dreams 2009 will be held in Lake Oswego, Oregon.  A past Street that was held in Lake Oswego was one of HBA’s most popular.  In 2009, I hear those builders who showcase their homes will be scaling back in size and price.

In case you missed my posts: “Baby Boomers Aging in Their Homes“, “New Homes for $50,000?” and “New Cottages for Seniors“, you certainly know how I feel about smaller, quality affordable, single-level homes.

Also in an article about Randy Sebastian (Renaissance Homes), I read where he has plans to build a “boomer” type subdivision in Wilsonville.  However, because of his bankruptcy, time will only tell if that ever gets completed.  This could be a start!   Hopefully I can get off my soapbox soon.  Here’s what the article said:

Home Sizes Shrink to Lure Buyers

Home builders are reducing the size and options available to appeal to buyers with less money to spend and who are facing a harder time getting financing.

Los Angeles-based KB Homes had shrunk its homes from 3,400 square feet, selling for $450,000, to 2,400 square feet selling for $300,000 to appeal to buyers. Now, it’s shrinking its homes yet again–1,230 square feet priced at about $200,000

Other builders, including Warmington Homes and John Laing Homes, have taken similar approaches.

We’re getting back to more the way things were historically, kind of undoing the excesses, not just from a price perspective but home size and (fewer amenities), says Nishu Sood, a Deutsche Bank analyst.

The new KB Homes aren’t just smaller, they are more efficiently designed, says Steve Ruffner, president of KB Home’s Southern California Coastal Division.

“You could have a three-bedroom, 2,500 square-foot single-story home and all you had was wide hallways and bigger rooms. It wasn’t really giving [buyers] the utility,” Ruffner says.

 Source: The Associated Press, Alex Veiga

As I’ve stated in another post, typically when the economy is bad, people from the outlying suburbs want to move closer to town.  Also, what we typically see during times like this is that the larger homes don’t sell and people have a tendency to want to purchase the smaller houses. Builders may be sitting with their new construction inventory of McMansions for a while yet, or at least while the economy is in a downward trend. 

 

When I went to file my income taxes in October, my accountant told me he knows of many people that have said to him that as soon as the economy picks up they will be unloading their big houses, big fancy cars and excesses and they are just waiting on the side-lines for their financial situations to improve.  They all felt it just wasn’t worth the expense any longer.  Will we have a glut of homes with larger sq. ft. next year that just won’t sell – one of my predictions for 2009!

(For more local and national real estate news, click on my monthly newsletter – JUNG’S JOURNAL – on my website www.bettyjung.com).