After rising for six consecutive years (2010 to 2015), the average home size in the US has fallen steadily for the past four years (2016 to 2019). In fact, estimates indicate the average home built in 2019 was the smallest since 2011. This trend is evidence that builders are working to meet the demand for smaller homes; that they are trying to shift their production mix toward more entry-level homes affordable to first-time buyers.
Given this reality, it is important to keep in mind what it is first-time buyers most want to have in a home. Below are some of the findings recently presented at the 2020 International Builders’ Show (IBS).
What type of home do first-time buyers want?
- 77% prefer a single-family detached home
- 1,977 square feet is the median size home they want
- 59% would prefer to live in the suburbs
- 40% want a 2-car garage, but 12% want no parking facility at all
- 76% want the kitchen and the family room to be completely or partially open
- 57% want the laundry room on the first floor
- 70% want stainless steel kitchen appliances
What specific home features top their wish list?
- Laundry room
- Hardwood flooring for the living areas of the main floor
- Energy Star windows
- Walk-in pantry
What do they expressly say they don’t want?
- Charging station for electric car
- Cork flooring
- Wine cellar
- Golf course community
If first-time buyers had to choose (for the same amount of money) between a smaller house with high quality products/amenities and a bigger house with fewer amenities, 62 percent would opt for the former. Translation: after about 2,000 square feet of space, most first-time buyers will derive more value from quality amenities than from size.
A complete copy of the IBS presentation is available Here.
So, first time buyers want 2000 Sq. Ft. houses loaded with amenities? Wow! As a first time buyer in 1979 I was thrilled with a 1200sq. ft. 3 bedroom 2 story with no insulation and single pane wood windows.
The homes they are talking about here are now costing $350k for 2000sqft stripped down, to $400k with some nice amenities. How are first time buyers able to afford this? The only customers I have in that bracket are well healed retirees who are down sizing to this kind of luxury.
Regulations dictate so many upgrades and processes that were not being done 40 years ago, it’s a wonder anyone can afford the most basic new home.