Trillions of dollars of real estate capital are waiting on the sidelines. Developers, investors and homebuyers are asking, “When will the housing recovery begin?” and when it does, “What will it look like.”
When is the tougher question. Clearly, there are signs of a housing recovery now, but it’s crawling forward. At this moment, domestic and foreign investors are gobbling up billions of dollars of distressed residential properties with cash. They’re handing these single and multi-family residential purchases over to property management companies who are delivering handsome monthly rental incomes. But eventually, the inventory of distressed short sales and foreclosures will dry up, then the demand for new homes will return.
The what question is clearer to see, because signs in the design profession are pointing to right-sized-living concepts – such as smaller spaces, in urban areas that are closer to the jobs, and younger homeowners will be living lighter than their parents.
The right-sized movement
“The bursting housing bubble was inevitable,” says Santa Barbara Architect Matthew Hofmann. “Certainly, it was caused in part by hyper-speculation, unqualified buyers, and fraud, but there was also a wholesale rejection of the super-sized suburban MacMansions. The housing industry over-designed and misunderstood what people truly needed,” he adds. “For example, a significant segment of this next generation of home buyers doesn’t want a 3-car garage — it simply does not make sense to them.”
Hofmann, a 28-year old proponent of the “right-sized movement,” believes the future of home design is all about matching one’s home to their lifestyle. “It’s a natural truism that you can’t force someone into something that doesn’t fit,” he says. “Believe me, I know because I’ve tried – I’ve lived in huge homes and I’ve lived in a 150sf Airstream and there’s a fundamental dysfunction with having too much space and too much stuff.”
There is growing evidence that Hofmann, and other like-minded designers and savvy investors are coalescing on this waste-of-space mindset.
Hofmann describes it this way: “The best home is one that is suitably fit, or sized correctly for who you truly are, and where you are, at any exact moment in life, like a well-tailored Italian suit.”
According to a front page Business section article in the March 10, 2012 San Diego U-T, developer Bill Davidson is betting that new homebuyers are banking on the less-is-truly-more scenario. In an article written by Roger Showley, the 40-year builder describes his priority in designing new homes as “…all about how family lives.”
Miraval is a brand new 41-home community in northern San Diego County by Davidson’s development company. Their latest offering is priced in the mid $700k’s.
Smaller garages (OMG!!!)
In the article, Showley smartly asks the question, Are post-recession homebuyers downsizing their expectations? The writer then lets this multi-million dollar project’s leader answer the question by doing something developers haven’t done in decades – build smaller homes, with smaller garages, than they did last time.
“Not only does a third car bay eat into livable space, but (Davidson) thinks new buyers don’t need (huge garages) or want it,” writes Showley.
The homebuilder agrees. “Three-car garages hardly ever have three cars,” says Davidson. “It’s just for stuff.” Summarizing his point with, “Stuff’s not in.”
Apparently, the developer has trepidation about his beliefs, or his PR department is too timid to admit this truth to their prospective clients. There isn’t a breath of right-sizing on their own website.
So back to the question, What’s next?
Affordable, lifestyle-appropriate, well-located dwellings that meet the next generation’s need for right-sized living. The success or failure of this post-Recession offering will prove this unavoidable reality. Home designers and builders must adapt their industry to attract buyers who are not impressed with MacMansions and 3-car garages, packed with more and more stuff.
10 advantages to living in smaller spaces with less stuff
Here are 10 real life reasons why living in a smaller space with less stuff can be a very grand experience.
1. Lower utility bills – Now this is what I call serious sustainability!
2. Quicker to clean spaces – Serious time and cost savings.
3. Less clutter – Start by downloading the free app, Evernote, and reduce you paper and receipt storage by 90% overnight.
4. Better connected – Small spaces encourage people to interact and work out their problems. We no longer have our “caves” or sides of the house to escape.
5. Fresh is best – This may be the toughest one to see as an advantage, but it is the most rewarding. When you change the shopping question from, Can I afford it? to Where will I store it? you will begin to see the blessing. Start off by purchasing fresh fruits and vegetables at local farmers markets or Sprouts Farmers Market (has great prices and quality in San Diego) and just say, “No,” to excessive frig/freezer or pantry spaces stuffed with outdated food. This may mean controlling your dysfunctional relationship with Costco. But do you really need a 5-lb bag of peanuts or the treadmill that discourages us from ever leaving the confines of home? If you must, accompany a friend to the mega box store for the free samples.
6. Simplified entertainment technology – OK, this one will be fun. Donate the DVD player, 1990s audio receiver, 7-speaker surround sound, plasma TV, desktop PC, laptop computer, and countless remote controls, then go to an Apple Store and purchase an iMac and AppleTV, sign up for Pandora and Netflix, and put it in one place where the whole family can watch TV together. THAT’S RIGHT, T-O-G-E-T-H-E-R – it’s not a four letter word. If you must, go ahead and splurge on an iPad for travel. (I’m assuming you already have an iPhone… if not, donate the Blackberry to a good non-profit and get one of the iPhone 5s in September, too.)
7. Discourages procrastination – It’s harder to ignore need-to-dos when they’re staring right at you.
8. Less stuff gets lost – Smaller spaces have less places for stuff to hide, and when they do, they tend to surface a week later in a shirt pocket.
9. Fewer house guests – Thanksgiving is a great time to spend time with your family, and so much better enjoyed when they stay at hotels.
10. Park your car in the garage – I know, this sounds crazy, but try it. The first rainy day you’re going to send me a “Thank you!” text.
