The Big Demand for Smaller Homes
When purchasing a new home, one of the many factors to keep in mind is future demand for that home: How easily will you be able to sell it down the road? What will increase your chances of profiting as much as you can on the future sale?
We already know the importance of features like location, floor plan, and solid construction. A recent report from Barclays now gives us something entirely new to consider. According to analyst Stephen Kim, the forty-year trend of “bigger is better” is over, and smaller homes are becoming the preference for the majority of American home buyers. Kim believes we’re in the early stages of a major housing shift that will continue for the next several decades.
The two groups of homebuyers driving this change are Baby Boomers and Millennials. With the real estate market restored, many Boomers who lost equity during the Great Recession are now in a good position to sell their homes and downsize. Millennials’ main interest is location; they are more likely to choose a smaller home close to the city than a large home in the suburbs. Kim notes that smaller size doesn’t necessarily mean a smaller price tag, though. These are well-appointed “jewel box” homes, with lots of upgrades and amenities like countertops, flooring, and appliances.
What does this mean for today’s home buyers? A lot of shoppers still have a McMansion mindset, but it may be worth rethinking how much size you really need. For example, many homes have formal living and dining areas that are used only a couple of times a year. Instead of spending your house budget on essentially unused space, consider using that money towards flooring, countertops, and fixtures for a smaller home. You’ll not only enjoy the amenities while you live there, you’ll also be in a better position to sell when the time comes.
If you’re ready to get going on the home of your dreams, GoldenStateMortgage.com is here to help.