DownsizingBy Carly Felton
In the past couple of years, real estate in Atlanta – and all over the country – has undergone a tremendous change. Sure, prices fell and properties became harder and harder to sell; however there are a number of other significant, though often overlooked trends in the market.
According to the National Association of Home Builders’ (NABH) online magazine, homes are getting smaller and greener and multi-generational homes are on the rise. According to local real estate professionals, home offices have skyrocketed in demand as well. Below, Atlanta INtown explores these powerful trends.
Shrinking Size
The U.S. Census shows that the average size of a new single-family home in the South is starting to shrink for the first time in 10 years. Additionally, nine out of 10 builders surveyed by the NABH last year said they’re building, or planning to build, smaller, lower-priced homes than in the past.
“People are recognizing that they can’t afford to overbuy anymore,” says Dennis Creech, co-founder and executive director of Southface. “They’re going from 400,000 square feet to a more modest 35,000 square feet.”
Principal and Vice President of Business Development at Your Own Sanctuary Heyward Young agrees. “McMansions are out!” he says. “The hottest segment of the market seems to be the starter or bungalow-style home.” Jeffrey Dufresne, executive director of Urban Land Institute Atlanta believes this is because the household size itself is shrinking, as more people live alone, delay marriage and/or childbirth and have fewer children. Plus, people want convenience and that often comes in the form of smaller, Intown homes closer to work.
Going Green
Smaller homes are usually more eco-friendly, as well – one of the many reasons green homes are on the rise. “How many people do you think want higher energy and water bills?” Creech asks, rhetorically speaking. “Everyone realizes the days of cheap water and land are over. People are looking for greater value.”
Though the cost of a green home is generally three to six percent higher than a conventional home, the extra money is quickly repaid in energy savings and reduced transportation costs (for those who move closer to work and work-live-play centers). “Would you rather spend the money on your mortgage – which will get a return on your investment – or give it to the utility company and never see it again?” Creech says.
The green building market was valued at $10 billion in 2005 and grew to $36 billion in 2009. It may grow to $96 by 2013, according to a study by McGraw-Hill Construction last year. “Almost all new homes have green elements,” Young says. “It’s what the consumer wants.”
One example of this trend is 898 North Highland, a single-family home that has been converted into four green condos with rooftop solar panels, radiant floor heat, VOC-free paint, bamboo flooring, double insulated energy-efficient windows and a parking lot made from recycled tires.
Anne Miller, associate broker with Prudential Georgia Realty, says that even when buyers don’t specifically seek out green homes, when they look at a home and find out it has eco-friendly features, they may choose that home over others that aren’t green.
Talking ‘Bout My Generation
According to a survey by Coldwell Banker Real Estate, from 2009 to 2010, 37 percent of real estate sales professionals surveyed noted an increase in homebuyers looking for spaces to accommodate more than one generation of their family. Seventy percent of these real estate agents believe the economic conditions may cause an even greater demand for multi-generational homes this year.
Both Miller and Young say they see a lot of buyers looking for an in-law suite or a separate space for grown children to live. This can include elderly parents who can’t afford to retire on their own and are forced to move in with their children all the way down to college graduates who have been unable to secure a job. Areas like Glenwood Park have in-law/young adult suites on the property but separate from the main house, thus ensuring some privacy.
Working From Home
The NABH also suggests that many Baby Boomers are coming up with new ways of using their homes. Dufresne believes this is primarily true in regard to home offices. “As family sizes shrink, more home owners and buyers are converting extra bedrooms into offices, particularly since the ‘breadwinners’ may be in between full-time jobs and are working out of their homes on contract engagements,” he says.
Many employers have been downsizing and asking their employees to telecommute rather than come into a central office, and employees often receive tax breaks for working from home. Miller finds that when people work from home, they often want to keep their work environment separate from their home environment.
“Almost 100 percent of my buyers are looking for a home office or an extra bedroom to turn into a home office,” Young says.