The Mengles are at the forefront of a surprising trend in a number of
new subdivisions across the nation: Bigger homes are making a comeback.
"There's no doubt we're a lot larger than we were a few years ago," said Steve Ruffner, president of the Southern California division of KB Home, one of the nation's largest builders.
KB Home says the average square footage of houses currently under contract is 2,079, an increase of 13% from last year. And more KB buyers are picking models that exceed 3,500 square feet.
That is a change from the past few years, when builders
were downsizing houses to accommodate an era of frugality and austerity.
As the economy slowly improves and some consumers' anxieties ease,
buyers are upsizing again—though there is far less demand than before
for huge houses loaded with upgrades.
According to the Census Bureau, the average size of a
newly built home was 2,480 square feet in 2011. That was up 3.7% from
2010 and represented the first annual increase since 2007.
Charter Homes & Neighborhoods, the company that is
building the Mengles' new house, said the single-family homes it is
delivering this year are 200 square feet larger than the ones they
delivered last year, which works out to an increase of 5% to 10%. "The
big sellers last year were town homes," said a company representative.
This year, she said, the hot sellers are large colonials clustered in
parklike settings.
With the trend, some builders are seeing increased sales
prices. In April, the average home price was $282,600, up from $268,900 a
year earlier, according to census data, though that is down from
$329,400 in early 2007.
In its first quarter, KB Home saw its average selling price rise 6% from a year earlier to $219,000.
The return to bigger houses—which has taken industry
watchers by surprise—indicates that the housing downturn paused, but
didn't kill, America's love affair with supersize abodes. The trend is
an encouraging sign for builders, which last year sold just 306,000
newly built homes, the lowest number since record-keeping began in 1963.
A major driver behind the bigger-home trend is record-low
interest rates, under 4% for a 30-year fixed-rate mortgage, which allow
some buyers to move up without necessarily making larger mortgage
payments.
Some buyers say they reason that in the long run it is
cheaper to buy a big house now, even though they don't yet necessarily
need the space, and spread the cost over the life of the loan, instead
of spending money down the road for expansion projects.
And because many builders slashed prices in recent years,
especially on big houses that once were slow sellers, the cost
difference between midsize and large homes in some communities is
nominal.