Why Are New Homes Shrinking?

Published: Wednesday, September 14, 2016 - 2:41pm
Updated: Wednesday, September 14, 2016 - 2:49pm
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(Photo courtesy of Shea Homes)
Builders are responding to market demand for less formal space and more open living spaces.
(Photo by Christina Estes - KJZZ)
Home under construction near 7th Avenue and Bethany Home Road in Phoenix.
(Photo courtesy of Shea Homes)
Builders are offering more multifunctional areas like this one which serves as a laundry room with space for an office, pet grooming or hobby desk.

For the first time since the Great Recession, new homes are getting smaller. In the second quarter this year, the National Association of Home Builders (NAHB) says the median single-family square area fell by 73 feet

One reason the NAHB gives for the drop is an increase in first time buyers — they typically choose smaller houses. But, Hal Looney, Arizona president of Shea Homes Active Lifestyle Communities, thinks design plays a role, too. In response to buyer demand, he said they’re building more efficient houses with less formal space. 

“We’ve engineered out the hallways and the wasted space and they’re more open floor plans and so when you walk in them they feel more grand,” he said. “A 2,000 square foot home today feels like a home might have felt 10 years ago that was 3,000 square feet.” 

Looney says the Phoenix market usually follows the national average when it comes to size. So far this year, the average new home in Phoenix is 2,544 square feet. In 2011, the average was 2,294 square feet.

“It’s been going up pretty consistently since 2009 and ’10 and I don’t think it continues to go up,” he said. “At some point it’s got to normalize and kind of get at some level of affordability.”

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