Debt Free

An article in the Houston Chronicle and various other papers today is reporting on the increasing taste of Americans for larger and larger homes, even as family sizes are on the decline. According to the article, 20% of American homes that have at least 4 bedrooms. This represents a 20% increase from 15 years ago. Nationwide the number of one bedroom residences dropped 5%, while the number of homes with 4 or more bedrooms grew by 15%. There are other amenities demanded by homeowners during the McMansionizing of America as well. It's not just size, homes are becoming both larger and nicer. Homes are now replete with three car garages, solid surface counter tops, high tech wiring, more than 2 bathrooms, soaring entryways, and upgraded trim packages. Weather this trend will continue as the new home equity produced by the real estate boom subsides is anybody's guess.

What does this this mean for you? Well, for one thing, it's becoming less affordable for the first time home buyer, and not just because of inflation induced price increases. There is simply not as much housing inventory in the class of typically desired by these buyers. How many first time buyers really need 4 bedrooms and three baths with a den and bonus room? Probably not too many. As the trend toward what the greenies term unsustainability (sustainability is a subject for a whole other debate) shows no sign of letting up, it means that getting into your first home is more important now than ever, lest you be either priced out of the market, or forced into an, ah, questionable mortgage. In some metro areas it's probably already too late, unless you actually studied hard in school, and availed yourself of that investment banking opportunity at Uncle Harold's office.

If you are already into a home, be aware what new home buyers are now looking for when you evaluate remodel projects with an eye toward future value enhancement. When it finally comes time time to part with your abode, you'll be competing in the marketplace with these newer homes, large and loaded (the home, not you after watching a football game).