The US Has Too Many Big Houses: 40 Million Too Many

It seems that America's fascination with the starter castle and McMansion may be over.

According to research, the majority of Americans no longer prefer the big, suburban home. Given five years of recession, joblessness and decreasing household income this would otherwise be considered common sense. But mere pragmatism has not previously interfered with home envy.

The demand is for homes of under 4,000 square feet, still a substantial hacienda by the standards of most of the world. Attached homes and those closer to jobs via public transportation are especially sought after. Car ownership has plummeted among younger people due to the cost of ownership - gas and insurance in addition to lease or loan payments - so walkability or public commutes command a premium.

The global trend towards urbanization has also affected the US which provides further impetus for the 'less is more' crowd. Demand has been cyclical historically so it is possible that larger homes will regain favor should the economy pick up in a broader-based and sustainable fashion. But for those looking to unload mega-homes, it could be a long wait. JL

Roger Showley reports in the San Diego Union-Tribune:

America has too many big houses -- 40 million, to be exact -- because consumers are shifting preferences to condos, apartments and small homes, experts told the New Partners for Smart Growth, holding its 11th annual conference in San Diego.Relying on developers' surveys, Chris Nelson, who heads the Metropolitan Research Center at the University of Utah, said 43 percent of Americans prefer traditional big, suburban homes but the rest don't.

"That means we are out of balance in terms of where the market is right now, let alone trending toward the future," he said.

He estimated that this demand suggests a need for 10 million more attached homes and 30 million more small homes on 4,000-square-foot lots or less. By contrast, demand for large-lot homes is 40 million less than currently available.

"Is it any wonder that suburban homes are plummeting in price, because there is far less demand of those homes than in the past," he said.

Shyam Kannan, director of the economic development practice at the Robert Charles Lesser & Co. consulting firm, said his company made its money in recent decades in advising builders of suburban master-planned communities. But that emphasis is shifting with consumer patterns.

"Many master-plan developers realize golf courses are dead and the town center is in, and they're working as hard as they can to deliver it," he said. "Unfortunately, they're bumping up against entitlement problems on the public side more often than not... We need to push public policy to keep up with the builders."

Joe Molinaro, who heads the smart growth program at the National Association of Realtors, shared the results of 2004 and 2011 consumer surveys to explain why preferences are changing.

Factors include a desire for shorter commutes, walkable neighborhoods, economic considerations and, in the case of Generations X and Y, born between 1965 and 2000, they want the non-car mobility they did not get as youngsters.

"Having the freedom not to be tied down to a vehicle all the time is a big plus to that generation," Molinaro said.

"Smart growth," loosely defined as nonsprawling developments that minimize distances, maximize public infrastructure investment returns and promote environmental sustainability, has been a buzzword in planning circles since the 1990s.

But with growth in all forms stalled for the last few years, planners, developers and investors are pondering how things will shape up with the inevitable upturn occurs.

"If we are optimistic that the world is not coming to an end and we're going to get out of this economic trough, it's a good time to consider, when production does ramp up, how we will be building as a country," Molinaro said.

The conference at the Sheraton San Diego Hotel and Marina on Harbor Island has drawn about 1,350 local, regional and national experts, who are mixing days of seminars with tours of San Diego neighborhoods to see smart growth in action.

"The San Diego region is an innovative pioneer in the smart growth movement," said Judy Corbett, executive director of the California-based Local Government Commission that is sponsoring the conference.

She said San Diego offers plenty of examples for transit-oriented, compact development; transformed downtown and old neighborhoods; walkable, mixed-use "urban villages: and high-tech, telecommunications and clean-tech businesses.