Home Builders Shrink House Plans to Battle Slump

Memphis Daily News ^ | September 14, 2007 | Kelly Evans

[Lorianne]

The McMansion may be shrinking.

With the nation's housing market in a slump and the mortgage market in disarray, many home builders are putting up fewer supersize homes and offering smaller floor plans. That seems to be what buyers suddenly want in an era of high prices and tougher financing.

"Financing has tightened down so much that many people aren't able to qualify for the larger houses," said Kathryn Boyce, an account executive in Northern California for Boston-based real-estate research firm Hanley Wood Market Intelligence. "Throughout the U.S. people can't afford what they previously did. Floor plans are going to get smaller."

[Tax-chick]

many home builders are putting up fewer supersize homes and offering smaller floor plans

There's a thought.

[mewzilla]

They may be getting smaller. Is that necessarily cheaper?

[Edit35]

This subprime “crisis” has been so blown out of proportion.

DiTech is still advertising like crazy. So is Countrywide Financial. So is E-Loan.

So are dozens of home equity mortgage hawkers, including so-called subprime lenders. They are ALL still seeking customers.

TV, radio, direct mail. It remains almost endless.

All of which means .... this subprime “crisis” is largely an obsession of the ‘lets-promote-some-bad-news-about-the-Bush economy’ crowd.

Subprime lending, in reality, only makes up approx. four percent of the entire mortgage industry, which in reality only affects 7 percent of the US economy.

All of which means that things are going good. Thank heavens the stock market has not fallen for this baloney.

[SIDENET]

Bring back the classic shotgun shack.

I would live in one.

(but my wife would kill me)

[af_vet_rr]

They may be getting smaller. Is that necessarily cheaper?

In my neighborhood, a 900 - 1000 square foot house on a small lot runs $250,000 - $300,000, although thankfully the price seems to be dropping (this is inside a city, and no homeowner's association, with houses painted all kinds of colors, etc.).

People were moving into our neighborhood and others, and buying up these types of houses (a lot of them were shotgun shack-style places that were built after WWII when the local Air Force base expanded). Up until a lot of us lobbied the city, they were tearing down or selling the houses, and building multi-story McMansion type houses literally property line to property line.

If you've never seen a 3-story (with an attic - not sure how they got around the building code with that one) 1000 square foot house that literally goes property line to property line, it's a site to behold. And one that pisses you off if it's next door to you since it kills your property value. For some reason, people don't like looking out the window and seeing nothing but wall 30 feet up.

[Maigret]

My great grandparents raised 13 kids in a ‘shot gun’ house, none of them grew up to be killers, deviants, or democrats, but I’m repeating myself.

Those kids loved that home so much they’ve kept it intact and commissioned art featuring it.

Maybe a little less wretched excess will be good for us?

[maine-iac7]

"Throughout the U.S. people can't afford what they previously did. Floor plans are going to get smaller."

They couldn't afford the MacMansions in the first place. That's the problem.

I wrote on this in one of my recent columns, titled: MacMansions

Opening paragraph: "I’ve long wondered when the Piper would show up and demand payment for the outrageous prices that homes have risen to – skyrocketed to – in the past decade. Now we all know.

(Other excerpts:)

The old formula used to be: your rent or mortgage should not exceed 1/4th of your monthly income. That is what was used for qualifying, to make sure the buyer and the mortgager alike, would be safe.

That rule of thumb, as far as being able to afford a rent or mortgage, still holds true. Math is math. However, banks, lenders and such started rubber-banding the qualification criteria. One method, for example, as we know, was the dastardly variable rate. Then along came the “pay the interest portion only” scheme. Both these methods lulled people into buying way over their heads.

Even before the walls started crumbling recently with the mortgages that can’t be maintained, there was the hint of a swing the other way, towards the mini-house. This will be interesting.

Somewhere in between that extreme and the MegaMansions is, perhaps, the ideal place to be."

[Spunky]

"If you've never seen a 3-story (with an attic - not sure how they got around the building code with that one) 1000 square foot house that literally goes property line to property line, it's a site to behold. And one that pisses you off if it's next door to you since it kills your property value. For some reason, people don't like looking out the window and seeing nothing but wall 30 feet up."

[Dems_R_Losers]

I think the big-house mania has run its course. People now prefer to live closer to where they work and have less property to maintain in their busy lives. Big homes mean long commutes and lots of cleaning and furnishing and yard work. Who has time for all that?

[Lorianne]

Exactly. Banks financed bigger and bigger homes for people who wouldn’t have qualified for homes half that size 20 year ago.

Plus having to take out more loans to furnish and maintain such homes.

Of course, people who take those huge mortgages in excess of what they can afford are to blame.

[SuziQ]

One of the biggest problems with the new houses was just the sheer amount of WASTED space. I mean, if you can't get more than 3 bedrooms in a 3500 square foot house, there's something wrong with the plan! Also, many young couples were buying these homes, which required two incomes. They weren't thinking of what might happen if one of them got sick for any length of time, or if the wife decided she really would like to spend some time with the kids while they were really little. This got a lot of families into a big financial crunch.

I'm glad some folks are beginning to use some common sense when it comes to homes. Now I'm not saying that 3500 sf is bad, in fact, I'd love for our next house to be that big, but I intend to have at least 5 bedrooms in it, in addition to a home office, though that might double as a guest room. But it's also going to be on at least a acre of land, or more, so it won't look like some incredible hulk on the lot!