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Big houses making a comeback

By Gretchen Wegrich Updated on 12/17/2012

After cutting back square footage for the last five years, homeowners may finally be interested in increasing their living space again. A recently released survey by nation-wide homebuilder organization PulteGroup found that, regardless of age, the reason behind the “upsizing” trend was a need for more living space and a growing family.

According to Deborah Meyer, Pulte’s chief marketing officer, the upsizing trend reflected a renewed sense of optimism in housing. Everyone still wants and needs a larger home, Pulte said, but these same homeowners are also focused on using the existing space within their homes as efficiently as possible.

Although researchers predicted that baby boomers would want to downsize their homes, 84 percent of the homeowners surveyed between the ages of 18-59 said they did not intend to downsize, reflecting the large decrease in home prices that took place during the last five years. When faced with selling their large homes at a loss, many homeowners have opted to stay put throughout their retirement, a choice that also reflects an increase in the popularity of reverse mortgages.

On average, the size of a new home grew by 3.7 percent between 2010 and 2011, according to data released by the US Census Bureau. This figure reflects a demand for larger spaces and was the first size increase since 2007. However, this increase is not located in the “ex-urbs,” says the American Institute of Architects.

Instead, many areas are expanding home size in urban infill locations, noted AIA Chief Economist, Kermit Baker. This change is reflected by neighborhood design elements, Baker added, including an increased demand for community access to public transit, pedestrian areas, proximity to job centers, retail options and open space.

Residential architecture firms are seeing an increase in demand for multi-generational housing, an increase of six percent since 2011. Demand for access to public transportation was up 12 percent from one year ago. Remodels, mostly to kitchen and bath areas, were up 23 percent from last year.

Since the last housing boom, trends in homebuilding and remodeling have shifted from extravagant to practical. Energy efficiency and accommodating growing families are spurring recent growth. Baby boomers, in particular, want to maximize the efficiency of their existing space.

Homeowners have many desires for their homes, said Meyer. “We’re hearing this group say they want functionality and smartly-designed homes without wasted space,” Meyer said, noting that smaller homes were not part of the want-list. These findings are optimistic at the high end of the market, which lost value during the housing crash, as well as for homebuilders.

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About The Author:
Gretchen Wegrich
Gretchen Wegrich is an editor at Lender411. She specializes in mortgage basics, personal finance and green living. She graduated with a bachelor's degree in writing from University of California, San Diego and previously worked at the Santa Cruz Sentinel. Contact her at gretchen@lender411com.

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