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| 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.
