Downsizing Trend in Retreat as Big Houses Make a Comeback
Minneapolis — Sprawling single-family houses, spurned just a few years ago by buyers, are back.
And they’re bigger than ever.
For the first time, the average size of a new single-family home built in the United States topped 2,600 square feet in 2014. About a third of the houses built last year were larger than 3,000 square feet.
“You have seen the homes just growing bigger and bigger and bigger,” said Teresa St. Amant, a Twin Cities architectural designer. “There are people that don’t want really huge houses, but the reality is everybody wants a lot in their home, so they tend to creep up in size.”
Average home sizes fell during the first few years after the housing bust. The weak economy, high fuel prices and a surge in apartment and condominium construction led some to speculate that the American dream had changed. Instead of a big house in the suburbs, consumers would instead opt for smaller homes near central cities.
But average home sizes in the U.S. and the Midwest region began climbing again in 2011, and now are bigger than they were at any time before the recession.
Homes larger than 4,000 square feet accounted for 10 percent of all new homes built in the U.S. in 2014, almost double what they were a decade earlier.
Ryan Cook, 30, and Trent Kasper, 25, are building a 4,000-square-foot house in the Minneapolis suburb of Minnetrista, in a development where hundreds of new houses are planned. Theirs will have four bedrooms, three bathrooms, an upper-level laundry and an unfinished basement where they might add a home theater or playroom for future children.
“It wasn’t really about the square footage,” Cook said. “It was more about the design of the home, finding one that fit our needs and wants.”
They are paying about $560,000 for the house, and said the current market was part of the draw. They’re expecting to get an interest rate of about 4 percent.
“That’s the only reason we can afford what we can afford,” Cook said. “Ten years ago, you couldn’t have gotten this big.”
The surrounding development, when it is complete, will have a pool, a clubhouse and baseball fields.
Chris Galler, CEO of the Minnesota Association of Realtors, said the draw for buyers is simple: “It’s brand-new.”
Cities Were Waiting to Grow
An online search of current Twin Cities real estate listings shows about 700 new, single-family homes measuring 2,500 square feet or more. While residential building activity has slowed from a year ago, the Builders Association of the Twin Cities noted that single-family home construction has outpaced apartment development in recent months.
The newfound interest in large single-family houses has been a blessing for cities that have been sitting on empty land. In Inver Grove Heights, south of St. Paul, the City Council recently approved a development that will include 77 houses — with more likely to follow — and connect to $13 million in water and sewer infrastructure built in 2008.
Further south, in Rosemount, city officials were left with a partly finished development after Rottlund Homes went under in 2011. The development’s single-family homes sold well, but its townhouses didn’t.
Rosemount Senior Planner Eric Zweber said the city recently approved more townhouse development, but the most significant demand is for single-family homes. In its newest neighborhood, the largest houses measure about 3,700 square feet and cost around $500,000.
Officials in suburban and exurban communities have talked in recent years about more sustainable apartments or townhouses, but single-family homes still dominate the landscape.
Christopher Leinberger, a nonresident senior fellow at the Brookings Institution and a former real estate developer, maintains that there’s “pent-up demand” for more sustainable, walkable development. “The problem is that the homebuilding industry in particular does not know how to deliver that product,” he said.
Cities aren’t necessarily ignoring the idea of dense, walkable development. Ed Goetz, director of the University of Minnesota’s Center for Urban and Regional Affairs, said it’s just hard for them to say no when a developer walks in with plan for a big home project that will boost the population and the tax base.
“It’s not clear that these communities, even if they talk the game of walkability and compact and efficient development, ⅛are⅜ driving development patterns as much as they might be able to,” he said.
Houses are getting bigger in inner-ring suburbs, too. In Edina, less than 10 miles from Minneapolis, the teardown trend is showing no signs of slowing — 134 single-family home demolition permits were issued last year, compared to 33 in 2010 — and the new houses can be upward of 4,000 square feet, said City Manager Scott Neal.
“Absent any economic shock or change in the way that we handle these things from a regulatory standpoint, I don’t see any factor that would slow it down much,” he said.
The demand for more square footage is only expected to grow.
“As long as incomes are rising and we’ve got a significant high-income population, there’s going to be a demand for that type of housing,” said Goetz of the U.
Galler, from the Minnesota Association of Realtors, said the trend can be traced back to the birth of the two-income household.
“It’s basically when women started to enter the workplace in larger numbers, at higher income levels, and families moved from poor cities to the suburbs,” he said. “When they did that, they built bigger homes.”
But “bigger” then wouldn’t turn many heads now. In 1973, the average new single-family home in the U.S. was 1,660 square feet.
During the recession, Goetz said, there was a hope in the urban planning community that high energy costs — namely, gas prices that made living in the suburbs more expensive — would force major changes in the housing market. But just a few years later, costs are back down and old habits have re-emerged.
“It’s a little bit discouraging to hear that the memories are so short on this,” he said.