For the First Time in 27 Years, New-Home Buyers Opt for Smaller Homes

Home Sizes Fall as Builders, Buyers Embrace Economic Reality

By Steve Kerch

RISMEDIA, January 28, 2010 — New-home buyers responded to the tough times in 2009 by opting for smaller houses, driving down the average size of a house built in the United States for the first time in 27 years.

Data recently released by the National Association of Home Builders (NAHB) found the average size of a new home that was completed in 2009 fell to 2,480 square feet from 2,520 square feet in 2008. The last time the average completed-home size fell by a statistically significant amount was 1982.

“You’ve heard the mantra ‘downsize me’ and ’small is the new big?’ Well, last year was definitely a downer,” said Carol Lavender, president of Lavender Design Group, a residential design firm in San Antonio, Texas.

Homeowners surveyed by Better Homes and Gardens magazine said downsizing was becoming a bigger priority: 36% said in November 2009 that they expected their next home to be “somewhat smaller” or “much smaller” than their current home versus 32% who said that in 2008. “Not surprisingly, we see a ‘cents and sensibility’ approach when it comes to buying or improving a home, with practicality and price being the top priorities,” said Eliot Nusbaum, the magazine’s executive editor of home design.

While the small-house movement in the United States has been gaining steam for a number of years, the recession has accelerated it and home builders have responded.

“The era of easy money is over. You really have to think before you go out and decide you need that five-bedroom, five-bath home,” said Rose Quint, the NAHB’s assistant vice president for survey research. “Couple that with the energy cost concerns of consumers today and I think we will continue this trend. Houses will not shrink drastically, but they will shrink.”

Although actual square footage of homes didn’t fall until 2009, the percent of homes with four or more bedrooms in them has been falling since 2007, NAHB data show. And in 2009, the number of homes with three or more bathrooms fell for the first time since 1992.

Two other trends in home construction are contributing to the declining square footages: The prominence of first-time buyers in the housing market and the increasing number of households with members 55 and older who are buying homes.

First-time buyers, driven into the market in good part by the availability of an $8,000 tax credit, are more likely to compromise on home size in exchange for a lower price. And the 55-plus crowd tends to purchase single-story homes, which generally are smaller because of the land costs that favor the more-efficient two-story plans.

“Barely over half of new homes today are built with two stories or more,” Quint said. Two-story homes peaked at about 55% of the market in 2006. For 2010, home builders say they will focus on lower-priced models and smaller homes. More than 95% of builders surveyed by NAHB in January said that was the way they saw their business evolving this year.

The penchant for smaller homes will necessitate some design changes. Builders, attempting to respond to those consumer demands as well as hold the line on prices, told the NAHB surveyors that they were most likely to include these features as standard in their houses this year:

-Walk-in closets in the master bedroom.
-Laundry rooms.
-Insulated front doors.
-Great rooms.
-Energy-efficient windows.
-Linen closets.
-Programmable thermostats.
-Energy-efficient appliances and lighting.
-Separate shower and tub in master bathrooms.
-Nine-foot ceilings on the first floor.

Among the things that builders said they were least likely to add to houses in 2010:

-Outdoor kitchens.
-Outdoor fireplaces.
-Sunrooms.
-Butler’s pantries.
-Media rooms.
-Desks in kitchens.
-Two-story foyers.
-Eight foot ceilings on the first floor.
-Multiple shower heads in the master bath.
-Smaller kitchens.

“You can see that builders are concentrating heavily on energy-saving features,” Quint said. “But a lot of the luxury items are on the chopping block or on hold as builders try to lower costs.”

Experts Estimate that 25% of Home Shoppers Are Dual Tracking: In the Market to Buy or Rent

Real estate portals adopting rental search

By Associated Press business staff

January 15, 2010, 5:35PM

LOS ANGELES -- In a strategic move, two of the biggest real estate sites -- Zillow.com and Trulia.com -- are joining the crowded ranks of rental Web sites.

The decisions come as more people are shut out of the housing market. Some 30 percent of households rent, but that figure is growing amid high unemployment, rising foreclosures and tighter mortgage lending standards.

Zillow launched its rental search function last month. While it only has about 2,000 rentals listings right now, the company plans to boost that number sharply in the next couple of months by taking in listings from brokerages.

"We think about one-quarter of all home shoppers now are dual tracking, they're actually in the market to buy or to rent," says Spencer Rascoff, Zillow's chief operating officer.

Trulia expects to debut its rentals search with more than 4.5 million listings within the next six months.

"We're building multiple tools to help consumers compare, contrast and make better decisions on whether they should be renting or buying in today's market," spokesman Ken Shuman said.

Seven out of the 10 most visited real estate Web sites last month offer rentals, according to Hitwise, an Internet tracking firm.

Increasingly, real estate agents are advertising homes on Web sites like Realtor.com to find tenants, not just buyers. Some rental sites are also getting listings from Multiple Listing Services -- databases of homes compiled by real estate agents.

"A lot of times we now notice that a home will be listed both for rent and for sale on our site, because the homeowners are having trouble selling the home," says Douglas Pope, co-founder of real estate search site HotPads.com.

A bounty of choices is a good problem to have if you're a renter. But don't expect to find the universe of available properties on a single Web site.

It helps to know what kind of rental you prefer: a house, an apartment in a small building, or a bigger complex full of amenities like a gym, pool or 24-hour security.

Generally, Web sites for rentals let users comb property listings for free. Most display photos, interactive maps, the ability to search by city, ZIP code or attributes such as number of bedrooms, price or amenities. They also include contact information for the leasing agent or owner.

Narrowing choices is the name of the game, and some sites make it easier than others.

Craigslist.org is a favorite with individual building owners, homeowners and property management firms. The portal, which has sites for 30 or so markets, doesn't charge for ads.

But its no-frills approach makes winnowing searches cumbersome and time-consuming compared to other sites. You can try to focus a search by ZIP code, or city, but you may get listings that are outside those parameters.

Still, it has filters that help someone looking to rent a room, swap houses or rent their property for only a few months -- something many other sites don't.

And Craigslist's rental listings are sorted by date and die off after a week in several major markets, which means they can be more current than those on other rental sites.

Some portals, such as Apartments.com and Rent.com, cull many of their listings from property managers handling large apartment complexes or condos. I didn't see many smaller properties turn up in several searches, however.

Others sites, like Realtor.com, offer condos or single-family homes listed by real estate agents, but not apartments.

Rentals.com gathers all kinds of rental property listings and lets users narrow searches by type of property. The firm says it has 72,000 unique listings, but cautions that available properties vary from market to market and "sometimes can be very low."

Zillow, meanwhile, which already provides a trove of neighborhood data, among other features, estimates people looking to rent account for more than 10 percent of its visitors.

Those would-be renters can search homes for sale or rent at the same time. They can also find Zillow's estimate on what it would cost them to rent or buy in the same neighborhood.

The concept is similar to a feature HotPads rolled out three years ago. The site lets users scan a map dotted with homes for sale and for rent. Trulia.com appears to be planning a similar rent-versus-own feature.

With the foreclosure crisis expected to continue this year, that's a calculation a many potential renters will be doing.

Cleveland's Beer Scene Is About to Get Even Better!

Noted brewmaster Andy Tveekrem returns to Cleveland to pour his energies into microbrewery

By Michael Heaton, The Plain Dealer

January 12, 2010, 2:00PM

He's baaack.

In November, rumors in the microbrew community started bubbling up. Certain sudserati had spotted legendary master brewer and former Akronite Andy Tveekrem sipping a few brews around town. Was he back visiting for the holidays? Or was something bigger brewing?

Tveekrem is back in Cleveland. If all goes according to plan, there will be a new microbrewery and beer garden on West 25th Street come June. Tveekrem is joining Sam McNulty to create the Market Beer Garden directly across from McNulty's Bier Markt, just north of the West Side Market. McNulty also owns Bar Cento and Speakeasy, both of which are adjacent to the Bier Markt.

McNulty feels that landing Tveekrem for the new brewery project was destiny.

"I was backpacking in Thailand," McNulty said. "I stopped in a bar in Bangkok that had Wi-Fi. I happened on a blog that said Andy was leaving Dogfish Head. I e-mailed my business partners right away and told them we have to get this guy. He does amazing things in the brew house."

Tveekrem, 46, has moved back from Delaware, where he was the brewmaster for Dogfish Head Craft Brewery for the last five years. He and his wife, Vickie, who was a waitress at the Great Lakes Brewing Co. when he began his brewing career there, are renting in the Tremont neighborhood for the time being.

"What is really exciting is the opportunity to see this through from A to Z, to design the brewery, install the equipment, formulate all the beer recipes, and then put them all out there for folks to enjoy," said Tveekrem.

"I've formulated and brewed a variety of beers over the years, but never had the chance to do all of the beer list from scratch."

Tveekrem grew up in Akron and earned a bachelor's degree in history from the College of Wooster. He also has a master's degree in history from Kent State University. He studied brewing at the Siebel Institute of Technology in Chicago.

He began with Great Lakes Brewing Co. in 1991 and was brewmaster when he left in 2000. During his time there, Great Lakes went from producing 850 barrels a year to 18,000. Pat Conway is one of the founders of the company.

"Andy is a talented brewmaster," said Conway. "He helped us transition into our ales and some other different beers than we had in the very beginning. We wish him well and hope things work out for him."

After leaving Great Lakes, Tveekrem worked at Fredrick Brewing Co. in Maryland for four years, then moved to Dogfish Head. He is formulating his beer menu for the new brewery right now.

"I tend to gravitate toward IPAs [India Pale Ales] and hoppy ales, although I'm also quite fond of hefeweizen and porters," Tveekrem said.

"We'll have 10 all the time, with some of them being seasonals and novelties that come and go throughout the calendar year. So, eventually, we'll have 20 to 25 beers through the year. Maybe more as time goes on."

Matt Cole is a partner and brewer at the Fathead Brewery and Saloon in North Olmsted. Tveekrem hired Cole when they both worked at Great Lakes.

"In this business, it's lead, follow or get out of the way," said Cole. "Andy is a leader. He's creative and not afraid to try new things. He's been a beer ambassador for a lot of us in this business for a long time."

The 6-foot-4 Tveekrem (the name is Norwegian) has become something of a striking, Viking presence in the West 25th Street area since he moved back to Cleveland. There's one extra advantage to this new job at the Market Garden Brewery.

"I can walk to work," he said.

Cleveland Ranked Among Top Housing Markets in 2009

Locations With The Highest Increase In Home Sales For 2009

The top 10 housing markets of 2009 include Cleveland, Detroit, and other cities that suffered the most during the global economic recession. After experiencing the largest drops in housing prices, these markets experienced the largest increase in home sales in 2009 as buyers sought to buy low, and eventually sell high when these markets recover long-term. See the following article from Housing Predictor for more on this.

You might look at the list of the annual Top Housing Market Winners in 2009 and think twice about some of the winners. But then again it's been an extremely challenging year in real estate.

Home sales in the Top 10 markets got a great improvement towards the latter half of the year with help from lower housing prices, extremely low mortgage rates and the federal government's first time buyers' tax credit. Sales volume data is compiled from the latest information available from assessor and recorder offices throughout the country.

After suffering through one of the most severe downturns in the nation Cleveland, Ohio leads the list with a huge increase in home sales followed by Detroit, Michigan. Home prices have gotten so low in both markets that buyers are flocking to the two areas for what they expect to be long term investments.

Ten states are represented on the top housing market list in 2009, including a strong showing of markets in the mid-west and Great Lakes region.

Top 10 Housing Markets 2009

Rank / Real Estate Market
1. Cleveland, OH
2. Detroit, MI
3 Providence, RI
4. Burlington, VT
5. Milwaukee, WI
6. St. Paul, MN
7. Austin, TX
8. Oklahoma City, OK
9. Pittsburgh, PA
10. Omaha, NE

This article has been republished from Housing Predictor. You can also view this article at Housing Predictor, a real estate analysis and forecasting site.