Are “McMansions” on their way out? Bigger may no longer mean better for single-family homes. Some real estate markets are seeing various factors contributing to a less-is-more trend as home buyers opt for less square footage.
“Yes, I think the less-is-more trend is growing,” says John Phillips, vice president of professional development for the Mississippi Association of Realtors. “Credit for homes is harder to get and qualifying for loans is more difficult. That’s what’s driving it.”
He also thinks the desire to cut energy costs and have less maintenance, building green and the growing Baby Boomers market are driving the trend toward smaller homes.
“‘Green’ is the word and smaller goes with that. Also, empty nesters want something that’s easier to keep up,” he said. “We’re seeing it all over the state.”
Phillips finds the hottest thing selling is what Realtors consider a modest home. Anything under $100,000 is selling well, along with homes in the $100,000 to $140,000 price range.
“Small homes now can have the best of everything and still use high-end products — just in a smaller package,” he said. “There is not much demand now for big homes in the $300,000, $400,000 and $500,000 range. There is a lot of inventory of those homes in all the state’s metro areas. Builders thought it would never end and some have a lot of inventory on hand.”
But Jackson commercial and residential realtor Scott Overby does not necessarily agree. “We are still seeing activity in all price points and sizes,” he said. “However, concerns regarding the economy have not necessarily affected smaller homes as much since there are considerably more buyers for smaller homes and lower price points than larger homes and higher price points at any given time.”
Regarding smaller homes, Overby adds that bells and whistles always sell at any price point and luxury items are often part of the package.
“Today’s higher end amenities set the bar and become tomorrow’s base,” he said. “Fifty years ago, walk-in closets or even second baths were considered luxuries. Today, they are a must. Upgraded kitchens with stainless steel, commercial grade appliances, solid surface counters and plenty of storage are now the norm. Master suites and hardwood floors are also now considered standard.”
Michele Rumbley feels home buyers want the best deal they can get and are trying to find the most square footage for their money. She is with Roddy Rumbley Real Estate and currently serves as vice president of the Jackson Association of Realtors.
“All home buyers are shopping longer trying to find the best deal they can,” she said. “I just sold a home to some first-time home buyers two weeks ago who had been looking at houses since last summer. There is so much on the market, people can be picky.”
In the business 14 years, she finds that empty nesters usually do want to scale down in size, but that does not mean they do not want something nice. “Quality does not always mean more size. They want granite and high-end finishes — just in a smaller home,” she said. “They want the same quality as the ‘McMansions,’ and they do not want fixer-uppers.”
Rumbley works mostly in Madison County where home prices range from $130 per square foot to $200 per square foot. In rural parts of the county, some 100 percent financing is available along with tax incentives for first-time home buyers in all areas. She does not see much inventory in the under $160,000 price range. Square footage from approximately 2,000 to 2,200 sells for up to $250,000, but there is not much new construction in that price range. Anything available sells quickly.
“First-time home buyers are penetrating the market along with people wanting to buy in the $200,000 up to $350,000 range who are looking for bargains,” she said. “Believe it or not, homes priced at $200 per square foot are still selling in Madison County.”
Contact MBJ contributing writer Lynn Lofton at firstname.lastname@example.org.