|My (our) first home Park Forest, Illinois|
Sixty years ago my father and mother bought their first home—a brand spanking new one. It had two bedrooms, one bathroom, a living room, a large kitchen and dining alcove, and a utility room. It was, at most, 1,350 square feet on a 70’x120’ lot. The house was located in the most written about post-war community in America on Chicago’s south side, Park Forest, Illinois. Its most important and valuable amenity was a furnace. In fact that, and the water heater, may have been all the tech amenities it had. It did not have a garage, just a carport. And, they were thrilled. (See current photo)
The housing industry is in hog heaven right now. Too many buyers and not enough product—and this includes the rental markets as well. Sure, there may be a few sane parts of America, maybe Iowa and Kansas, where there is some balance, but not around most urban areas and suburbs. Here, “it’s squeeze ‘em for everything they got.” In the SF Bay Area, townhomes that would sell in Orlando for $250,000 sell for $700,000 or more and are bid up and up (info, go here).
Builders update their price sheets weekly to adjust for the demand. Starter homes are now over 1,800 square feet and are more often at 2,400 square feet. In fact the average new home last year was 2,679 square feet (avg.) and the median was 2,491 square feet. Three bedrooms are a minimum, four are now typical. If one thing has changed in the Bay Area is that the single family lot has dramatically dropped in size; in fact most detached lots are now in the 2,800 to 3,200 square feet size, you can literally stand between them and touch both homes (traditional lots in the last housing bubble were minimally 60’x100’ – 6,000 square feet).
However, these are just numbers that react to markets, demand, interest rates, demographics, and governmental controls. While the rental market is hot again (due, in part, to the lack of ready cash by Millennial buyers), even it can’t cover the demand. And now many apartments are being designed to intentionally keep out children and extended family. While they can’t legally be excluded, just tweaking the design and layout does exclude families. And the rents are so high it takes multiple wage earners (married, partners, friends, desperates) to afford them.
Now back to the tutti-frutti. The buyer wants and expects (while bitching about the price) that their new home has everything. Here are the most of the top amenities that buyers want:
Walk-in closets (in fact, his and her walk-ins)
Luxurious laundry rooms (TVs, skylights, high-end appliances)
Extreme energy efficiency (beyond double glass, insulation, and Energy Star)
Great rooms (an open mix of kitchen, dining, family, and entertainment space)
Taller/higher first floor ceilings (9 foot plus)
Smart-er Homes (highest tech, fiber-optics, Wi-Fi, LED lighting, security cams and such)
Home Office (in the case of some, two home offices)
Hardwood Floors (They are back, no wall to wall carpets, sustainable bamboo is so nice!)
High-end finishes (Granite or other quality in kitchen and baths – especially marble baths)
Storage, closets, and even more storage
Minimum two-car garage, bike parking, (urban sites need to have more on-site parking)
Fireplaces (even though in California wood burners will probably be outlawed – gas is the alternative)
When luxury becomes necessity:
We went from fireplaces to central heating (look at the stacks on pre-1900 homes), to all-inclusive systems (HVAC) and now mandatory air conditioning. We are now installing solar systems for electrical support, and extreme high-end data and entertainment systems as standards. Kitchens look like they could be sets for the Food Channel, bathrooms fitted like a Four Seasons hotel spa, and garages are now operating rooms with tile floors. And all this at a cost.
While the yard is much smaller (smaller lot – less veggies, less maintenance = more free time; yeah, sure), the buyer wants a community that has nearby recreation, services, and restaurants. If possible, especially for the Boomer market, they want to live in a resort (they feel they earned and deserve it).
To be honest, these desires and residential needs are the same in Florida and California; it’s the vagaries of markets and governmental controls that separate the two price-wise. But the other significant impact to price is all the tutti-frutti (that I would not give up myself) that goes into these new homes. Now I ask you, don’t you want warming draws, wine fridge, outdoor kitchen, man-cave, home-theater, Amazon rainforest shower, gym, coffered ceiling in the bedroom, shoe racks for 200+ pairs, pet enclosure, a smart house that knows who you are, super-duper air and water purification, and of course a live-in maid. Just saying.