It's simple: Small is big in new homes

         Above the doorway in our kitchen in Connecticut, my wife Connie posted a wooden sign years ago.  It says, "SIMPLIFY. SIMPLIFY. SIMPLIFY."  The repetition is for my benefit since I can be a little slow on the uptake. 

         Consistent with her theme of simplicity, Connie bought a book called the "Not So Big House" when it was first published 10 years ago, and then

a few years later bought author Sarah Susanka's follow-up, "Creating the Not So Big House."  Connie would often gush out excerpts from the books, almost always, it seemed, while I was trying to get through the sports section of the local paper.  "Pshaw," I would say, "people want to show off their wealth through their homes.  They won't go for that smaller house stuff."

         Well, as typical, it turns out she was mostly right, and a few years ahead of the curve.  I say "mostly" to leave myself a little wiggle room, because I think the trend to smaller homes may be temporary.  Spending habits certainly change as a result of the economy, but human nature will survive into the next boom.  Showing off what you have is an American trait that may never go out of style.

         Still, for the next few years at least, homes will shrink.  According to a recent U.S. Census Bureau report, new homes last year decreased in size

by seven percent, to an average 2,065 square feet.  The loss -- or gain, as my wife and Ms. Susanka would argue -- equals the size of one room.  This marked the first annual drop in new home size in the last 15 years.

         The merger of demographics and a housing market in crisis is shaving home sizes.  Baby boomers like my wife and I are moving from our primary homes now that the children are leaving the nest.  We simply don't need the space.  With the savaging of IRAs and other retirement-oriented portfolios, boomers are not about to risk running out of money in their 90s by buying a trophy home they don't need in their 60s.

         As Connie and I ponder what kind of home to move to in a few years, we look at how we use the space in our current house.  Guests tend to congregate in our kitchen and the sunroom beyond; when we have more

than four guests for dinner, we serve them in our dining room.  But other than Thanksgiving and a few other dates, we rarely entertain more than four guests at a time.  Our next home could easily combine the kitchen with a dining area geared toward intimate small dinners but also with the ability to expand into a larger space for the occasional big gathering.  I'm not quite sure how we will do that, but my wife and Ms. Susanka will figure it out.

         On a similar note, and unless struck by some irrational last-minute desire, we will not have a formal living room in our next home either.  I can count on one hand the number of times we entertain guests in the living room in a year -- or the times our friends entertain us in their own living rooms.  In our experience, the living room is dead.

         The biggest decision about space in our next home involves our children and, someday, their children.  Some couples I've interviewed have actually told me they wanted a home near a hotel so that their children, and especially their grandchildren, would not be underfoot 24x7 during

visits.  Although I understand the motivation, we won't want our kids and theirs to commute to our home when they visit.  However, we will want to protect our own space.  In planning our next home, you can bet we will work hard at a design that puts the guest areas at the opposite end of the house from our master bedroom.  The test for far enough away is that I cannot hear our visitors flush their toilets.

         Naturally, sniffing a marketing edge, national developers like Toll Brothers are starting to promote heavily their smaller home offerings.  Age-restricted developments like The Del Webb Sun City communities have been producing smaller homes for years, but they tend to lack the fit and finish to satisfy many well-resourced baby boomers.  Local developers are now jumping into the fray too.  Yesterday, I received an email from the well-regarded Hampton Lake in Bluffton, SC, that attached an article about the smaller home trend.  The local Island Packet quoted Ms. Susanka and featured Hampton Lake.  You can read it by clicking here. 

         The cost to build a new home these days in the southern U.S. is lower than it was just a few years ago.  Construction companies and developers struggling to survive in a dismal housing economy have cut their costs and their prices.  Still, in the most popular areas for golf communities, count on construction costs of $175 to $200 per square foot for a nicely appointed home.  Cutting out a room or two from a 3,500 square foot house, for example, could save as much as $70,000, way more than most private golf clubs are charging for initiation fees these days. 

         The smaller space will eliminate the need to worry about furnishing another room, reduce the time it takes you to dust and vacuum, and remove any worries about whether you are using that room enough to justify what you paid for the house.  Best of all, less space will help you Simplify. Simplify. Simplify.