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Some Buyers Prefer Smaller Homes...

Some Buyers Prefer Smaller Homes

Some Buyers Prefer Smaller Homes | MyKCM

Over the past year, we’ve had plenty of opportunities to reflect on what we consider most important in our lives. The place we call home is one of the biggest things many of us are reevaluating. George Ratiu, Senior Economist at realtor.com, shares:

“The very nature of the pandemic, through the health implications, social distancing, and need to isolate, has really brought a central focus on the importance of home for most Americans…In a sense, it has elevated real estate markets as a centerpiece of our lives.”

For some, this has spurred an interest in making a move to a home that better suits our changing needs. In a recent study on today’s homebuyer preferences, the National Association of Home Builders (NAHB) states:

“When asked more specifically how the pandemic may have impacted their preference for home size21% or about 1 out of every 5 buyers, do want a larger home now as a direct result of the health crisis, while another segment – 12% – would prefer a smaller one instead.”

While you might expect more time at home to lead to a need for more space, it’s interesting that a significant portion of homeowners actually want less. For those who own larger homes right now and have a desire to move, today’s housing market is full of opportunities. Danielle Hale, Chief Economist at realtor.comexplains:

“In a real estate market that is tipped in the favor of sellers, boomers and older homeowners are really the ones holding the cards…Those who are selling homes can use the profits to help them buy new ones.”

As a homeowner today, you likely have equity that can be put toward the purchase of your next home. With the equity growth homes have seen over the past year, you may have more than you think, which can help significantly as you make a move into your next home. According to a report from the National Association of Realtors (NAR):

“Home sellers cited that they sold their homes for a median of

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Advantages of Living in a Small House

While the jury is still out on whether or not Tiny Houses -- micro-houses of 500 sq feet or less --  are here to stay or just a passing fad, Smaller Homes may be just the thing for those looking to live in high-demand areas.  Bigger than a Tiny House,  small homes range from 1000 - 2000 square feet.  Cottages, bungalows, and shotgun houses are all typical of the smaller homes that have been prevalent through generations of homeownership in the US.  In many areas including Bozeman and the Gallatin Valley, there is a wealth of them.  To get into 'hot' neighborhoods without getting into the really high prices, small homes represent a real option for some to live in a central location. What a small home lacks in space, it makes up for in easy access to amenities and walkable neighborhoods.  And with ready access to VRBOs and other short-term vacation rentals, a homeowner can get away without having that spare bedroom.  (You can always put up visiting friends and family at a nearby Airbnb.  And why not share meals at nearby restaurants? You know you hate cooking for a crowd!)

     According to a recent post in the finance section of Business Insider, it's not unusual for the value of small homes to rise faster than that of larger homes. In one region of Florida, small homes showed a dramatic growth rate of 19.5% each year (2013-2016), while the area's largest homes appreciated by only 5.1% during the same time period.  http://www.businessinsider.com/are-smaller-homes-valuable-2017-2 . The greater price appreciation of smaller homes is the result of people choosing a cheaper entry point into areas of higher demand, higher prices, and higher taxation.

     In addition to the greater rate of appreciation, the costs for maintaining a smaller house are significantly lower.  According to a recent article on Trulia.com,  the electric bill for a 1000-square-foot home is approximately $200 less per month than the electric bill for a 3000-sq-ft home on average.  Even routine repairs and maintenance are less expensive for a smaller house:  replacing a (smaller)

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