Are buyers still looking for square footage? [VIDEO]
Posted on Monday, March 16, 2015 at 11:29:38 AM
New-home sales haven't been great, which is a bit surprising given the low residential financing rates and favorable buying conditions present in today's housing market.
One possible explanation is the size of new homes - according to RealtyTrac, the average square footage of new homes is 2,607 sq. ft., up from 2,434 sq. ft. in 2005. To compound matters further, the average price of a new home was $297,000 in 2005 and $343,800 in 2014.
With that in mind, today's new homes are both larger and more expensive than homes built just a few years ago. This could very well be driving buyers away from larger homes, but that may not be the case. Instead, buyers could be wary of price, not size, when it comes to new real estate.
The Wall Street Journal noted that home sizes are up on a yearly basis, even as sales fall in the other direction.
"All the pundits [said], 'The McMansion is dead,'" Douglas Yearley, chief executive of luxury home builder Toll Brothers Inc., told investors, The Wall Street Journal reported. "But the American dream is still to chase the big beautiful home with the lavish master suite and the spectacular gourmet kitchen and the finished basement that has the wine room and the media room."