Reporting from Yuma, Ariz. — The Terraces subdivision here contains rows of 2,000-plus-square-foot homes appointed with sunken tubs, granite countertops and tile floors that stare off into open desert.
But as the economy has contracted, so have the homes.
The development will soon be dotted with new 1,700-square-foot houses on narrower lots that retail for more than $100,000 less than their predecessors.
Though the square footage of new houses tends to dip modestly in recessions, the size of the American home has essentially increased since 1973. But that changed last year, when the size of the typical house suddenly shrunk by 11%. That appears to be faster than at any time since the 1970s.
"People are realizing, 'Hey, I don't need the Lexus anymore,' " said Wayne Eide of the Development Group, builder of the Terraces. " 'I can live with the Camry.' "
The National Assn. of Home Builders recently surveyed its members and found 90% of them are building smaller now. Developers cite many factors -- increased energy consciousness, empty-nest baby boomers looking to downsize. But the strongest motivator is clearly the sagging economy.
About half of all homes sales are now foreclosures that retail at a big discount. Home builders, hemorrhaging money, are trying to compete by building smaller, cheaper models.
"A lot of the movement of home builders to smaller homes is because there's no choice," said Eric Landry, an analyst who follows home builders for Morningstar. "For people who build homes, it is the Great Depression. They're basically in survival mode, so they do what they have to do."
Skeptics question whether the shrinkage is just a brief reaction to a down economy, and, indeed, home sizes began to creep back up in the first quarter of this year. But they remain well below their peak, and the drop was so sharp and so sudden that some analysts wonder whether the nation could have reached a tipping point.
"Bigger has been better for a long time," said Stephen Melman, an economist with the home builders group. "Maybe this will be a significant change in direction."
Even as the typical American family has gotten smaller, the average size of a finished home has risen to more than 2,500 square feet in 2007, from 1,660 square feet in 1973.
