|The trend in residential construction is definitely toward bigger.|
In the last 30 years, the square footage of a typical single-family house has increased by 40 percent. Yet there are some buyers looking for smaller houses. Many empty nesters are looking to downsize from houses that often exceed 4,000 square feet to ones that are 2,000 square feet or smaller.
Another segment is the first-time buyer. Typically just starting out and cash-poor, the first-timer in the new-house market wants an affordable house that will launch him or her on the road to equity.
However, while both segments want smaller, they want to have the appearance of bigger.
There are several things to keep in mind when you market smaller houses to empty nesters. The most important is never skimp in your design of the kitchen, living room and master bedroom. Empty nesters are used to having these big, and if you make them smaller, they won't even look at the house.
Put yourselves in the empty nesters' place. If they are downsizing from 4,000 square feet, they don't want a master bedroom closet that's half the size of what they are used to. They might even want a nicer kitchen than what they had - for example, better countertops such as granite or Corian instead of laminate or tile.
Real estate agents need to be sensitive to the needs and prejudices of the buyers, and must always consider how both spouses will react to the floor plan.
Surveys show that women want two dining areas - a formal one and a breakfast room. You will need to guarantee both.
Because a lot of the product is designed by men, women often are left out of the equation.
When a woman comes into a plan and can see the toilet from the living room, that's a negative. To a guy, that's a positive. He won't miss any part of the game.
It is easy to generalize about buyers in other ways. The problem is that builders tend to lump all buyer segments together instead of developing housing to fit different niches, and real estate agents have to follow suit.
Market research helps you develop your criteria. You need to know who you are selling to, and come up with designs that reflect the characteristics and needs of your buyers - especially those whose needs are not being met by others.
There are a lot of different niches in the under-2,000-square-foot market as well as different stages in the lives of these buyers - whether young or older - to be accommodated.
The first-time buyer, for example, is barely out of the apartment complex. This buyer's expectations are very reality-based because of budget constraints. He or she doesn't have a lot of money to spend.
One of the major challenges being faced in the creation of affordable housing is rising land costs.
Plans have to be designed to fit smaller lots to reduce buyer costs. And that requires a lot of creativity. People buying their first houses today think they should have all the bells and whistles, but have no idea how much these things cost. What they should be buying is shelter, but instead they want to buy things like garage-door openers.
The unrealistic attitude of many first-time buyers is created when they visit new-home developments offering higher-price houses. They'll visit a model for $350,000 that had everything they might ever want in a house and then go to a development selling $150,000 house and demand the same things.
What some lower-end builders do to keep prices down is make standard items into options. If you save $100 10 times that cuts $1,000 from the price of the house. If buyer then wants to add these things later, when he or she has more money, then they can do it.
For example, the delivery price of oak handrail is about $32 a foot. After installation, it becomes a $750 to $900 item. When the situation is explained in that way, buyers will say, 'We don't really need oak handrails,' and the price drops.
Another example: Some builders don't offer kitchen cabinet hardware as standard, suggesting that, at $3 each, it would be better if the buyer went to the home center and made installing the hardware a Saturday project.
These things have to be explained carefully to buyers. More than anything else, they want to know that they are spending their money wisely and want to be assure that you are helping them look out for their best interests.