Are Residential Construction Businesses Paying Attention to the Smaller Home Trend? | 2-10 Blog

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How Residential Construction Companies Can Take Advantage of the Small Home Building Trend

From affordability to manageability, there are a lot of reasons why modern buyers are becoming interested in smaller homes. Learn why some buyers want smaller homes, along with tips for maximizing space.

A Major Trend

According to a recent survey from real estate advising company RCLCO, more and more buyers are expressing a preference for smaller homes. In its Housing and Community Preference Survey, RCLCO found that a decrease in new home affordability is one of the driving forces behind this trend. That said, the long-term trend actually predates the existing affordability crisis, which appears to strongly indicate that the demand for smaller homes will continue even after new home prices start to fall.

The desire for smaller homes appears to be more prevalent among key age groups. According to RCLCO’s findings, home buyers between the ages of 35 and 54 showed a preference for the largest homes, while both older (age 55+) and younger (under age 35) buyers showed a preference for homes between 1,500 and 1,999 square feet or even smaller.

Long-term Outlook

This recent report points toward increasing market opportunities for residential construction companies who are paying attention. When you consider that seniors are projected to outnumber children by the year 2030 and younger buyers are entering the home buying market in droves, it seems almost inevitable that the increasing desire for smaller homes will continue to grow.

At the same time, RCLCO reports that there is already a larger market for smaller detached and medium-density attached new homes than is currently being offered. If builders aren’t able to increase supply to meet this demand, RCLCO predicts that the new for-sale housing market might decline, as the U.S. population further diversifies over the next decade.

Taking Advantage

As they grapple with limited lot availability, builders can take advantage of the growing market for smaller homes. This may mean dividing larger lots to support a greater number of homes. It can also mean using creative strategies and forward-thinking design solutions for challenging lots.

To maximize lot space, builders should look for ways to prioritize privacy by crafting floorplans that minimize or eliminate windows along the side of a home adjacent to neighboring properties. Look for ways to build up instead of building out by utilizing creative vertical designs with dens and garages on the lower floor, kitchens and living rooms on the second floor and bedrooms on the third floor.

Tall ceilings can also be used to create a sense of openness and help offset the proximity of narrow walls. If a narrow lot makes the home’s kitchen feel too cut off from the dining area, builders should consider replacing a section of the separating wall with glass blocks or open space to create a greater sense of unity.

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