|Buyers Want Bigger Homes Again, Survey Says|
Jeff Brown - The Street JAN 22, 2013 2:50 PM
It turns out the Great Recession didn't kill the American hunger for McMansions after all.
Downsizing is a hard sell. The notion that a retiree should trade in a three- or four-bedroom family-sized home for something cheaper and easier to manage seems like a no-brainer. But lots of people just don't want to do it.
In fact, predictions during the financial crisis that Americans would shun McMansions in favor of smaller homes seem to have been off the mark. Yes, new homes did get a tad smaller toward the end of the '00s, but now that the economy and housing market are getting stronger, consumers say they want their next home to be as big as or bigger than their current one.
That's the finding in a recent consumer survey by PulteGroup (NYSE:PHM), the national homebuilder.
"It was interesting to see that 84% of homeowners ages 18-59 don't have plans to downsize their next home, even among baby boomers," Deborah Meyer, PulteGroup's chief marketing officer, said of the survey findings. PulteGroup's researcher polled 503 homeowners aged 18 to 59 in November.
Citing Census Bureau data, PulteGroup said the average size of a newly built home grew by 3.7% between 2010 and 2011, to 2,480 square feet. That was the first size increase since 2007.
Not surprisingly, younger homeowners said they wanted bigger homes to accommodate growing families. But the survey found that even homeowners nearing retirement and presumably done with child-rearing soundly rejected downsizing. Only 28% of those 55 to 59 said they wanted their next home to be smaller.
While the survey didn't probe the reasons, there are several possible explanations. A big home is a status symbol; many people want extra bedrooms to lure grown children and grandchildren to visit; and many view the home as an investment and thus favor bigger over smaller.
The survey did uncover some changes in consumer preferences. Even though homeowners don't want to go smaller, they want a more practical use of the space they have.
Many of the McMansions built in the '90s and '00s had formal dining rooms and living rooms in addition to great rooms or family rooms open to the kitchen. The survey found that these vestigial living and dining rooms may become expendable for more homeowners.
"According to the survey, 21% of homeowners ages 18-59 rarely use their formal dining room, while 17% said they rarely use their formal living room," PulteGroup said.
Many homeowners said they could do without formal living and dining rooms, and they expressed a preference for larger rooms overall, master bedroom suites, more storage space, outdoor living space such as patios, and greater energy efficiency.