Wednesday, September 9, 2009

Two Trends: One Up and the Other Small

Two Real Estate stories caught my eye today. The first is National home sales are on the rebound and the second is regarding buyers looking for smaller homes.

Alameda just had its best sales month in over a year, the national trend is also seeing the beginning to rebound. Homes are starting to sell at a faster pace as the inventory of unsold homes has shrunk.

The National Association of Realtors reported that nationwide, existing home sales have increased for four consecutive months.Existing home sales rose 7.2 percent in July to 5.24 million units, up from 4.89 million units in June and above the level of 4.99 million units sold in July 2008.

A driving factor in the sales surge the first-time homebuyer tax credit. The credit, that can reach up to $8,000 is credited to homebuyer who purchase between January 1 and December 1 of this year. It is rumored that the credit may be extended.

The last time home sales increased four months in a row was in 2004.

The other story was in the Baltimore Sun: Story Link

This is of real interest to Alameda homeowners, because many of the homes on the Island are small compared to the new developments out in East Alameda and Contra Costa counties.

The story focuses on Mette Ramanathan and her husband considered buying was a 2,200-square-foot, five-bedroom place and settled on a considerably smaller three-bedroom Cape Cod in Baltimore's Hamilton neighborhood.

"Forget the "McMansions" of the boom years. These days, small is the new big.For the first time in nearly 14 years, the median size of a new single-family home decreased, to 2,215 square feet last year from 2,277 square feet in 2007, according to the U.S. Census Bureau. Since 1991, houses for single families have been consistently getting bigger and bigger, mirroring the housing bubble and good economic conditions."
Many buyers are looking at the overall cost of owning and operating their home. Today's buyer wants to limit the mortgage, maintenance costs, utility bills and smaller homes allow more flexibility. This is another cost saving measure happening as people have watch their saving decrease.

The National Association of Home Builders found in a survey earlier this year that nearly nine out of 10 builders are putting up smaller homes, a trend that has accelerated since May 2008. And more architects say clients are demanding smaller homes, with 50 percent indicating square footage is declining this year compared with 15.5 percent last year, according to a survey by the American Institute of Architects.Ellicott City-based Grayson Homes, for instance, this year introduced smaller floor plans in its single-family communities, ranging from 2,200 square feet to 2,900 square feet.
According to the article Baltimore's most popular size was 3,200 square feet, and has now declined. But this may only be temporary. Average home sizes have fallen in previous recessions only to creep back up after the economy recovers. One item that may sustain the trend is the idea of being more green. Smaller homes leave smaller impact on the local environment.

For Alameda the home between 1,100 and 2,000 square feet is very common. If the trend continues this will add another value to home ownership on the Island. Take in account the Municipal Utility (AMP) and it makes Alameda very desirable.

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