For some California home buyers, better times mean bigger houses

The Sacramento BeeSeptember 27, 2012 

— For years now, urban planners have predicted that home buyers would opt for smaller houses in more urban-style neighborhoods when the real estate market recovers.

That's true for some. But with housing the cheapest it has been in decades, some buyers are returning to the large suburban tract homes that were hallmarks of the housing boom.

Homebuilders and housing experts say sales of larger homes have picked up in recent months, driven by customer demand.

"There's a sense of recession fatigue. People are just tired and ready to move on," said Chris Cady, Central California division president for KB Home.

KB, a national home builder with projects in Folsom, Lincoln and Roseville, said it has seen a 24 percent increase in the size of homes that its customers are buying in the Sacramento region, compared with a 17 percent increase nationwide.

The austerity of the recession and housing collapse, when the few homes that did sell tended to be smaller, has given way to increased confidence and renewed demand for more square footage, company officials said.

KB, which aims its products toward middle-class buyers, said its homes sold here increased from an average of less than 1,700 square feet in 2010 to more than 2,100 square feet in the second quarter of 2012.

Low prices, low interest rates and the marginally small cost of getting a bigger house are fueling the demand. It's sort of like a super-sized drink at a fast food restaurant; it doesn't cost that much more than a small one, compared to the extra soda you're getting.

"Affordability is a key driver to making decisions to buy bigger homes today," Cady said.

At the company's Silverleaf at Twelve Bridges community in Lincoln, models range from a 2,052-square-foot one-story plan that starts at $319,500 to a 2,589-square-foot two-story that starts at $341,500. The larger plan is proving popular with buyers opting for extensions that bump it out to about 3,100 square feet, said company spokesman Craig LeMessurier.

Zak Kriegel, 31, a Silverleaf buyer who closed escrow on Sept. 13, bumped his floor plan out as far as it would go. "I did all the pop-outs I could," said Kriegel, who runs an air conditioning and heating company.

Kriegel and his wife, who are planning to have children, moved from a 1,300-square-foot home in Loomis. "The wife said it's time to do the family thing," he said. "We needed room to grow."

Their model started as a 2,600-square-foot, three-bedroom, two-bath home with a two-car garage at a base price of $330,000. For $60,000 more they opted for a five-bedroom, three-bath house with a three-car garage.

He said a similar home would have cost upward of $700,000 at the peak of the boom in 2005, when suburban houses were selling for nearly twice what they go for now.

"For the value of what you're getting, you might as well add square footage," Kriegel said.

Trend shakes up planners' predictions

Buyers in other new home communities around the region are making similar choices.

Veronica Roberson, vice president for sales and marketing at home builder Taylor Morrison, said the company sold all its homes in a 70-unit project in Elk Grove called Teresina at Madeira. The houses ranged from 2,400 to 3,600 square feet with options that could boost the biggest model to 4,000 square feet. Prices ran from $350,000 to $450,000, she said.

"We had about 30 (homes available) at the beginning of the year," Roberson said, "We went through them pretty quickly."

Buyers were mostly families who were looking for "lots of room," she said.

With prices and interest rates near record lows, "they want to purchase as much as they can," she said. "It feels like people are more confident with jobs and the economy."

The trend runs counter to what some planners predicted would happen after the excesses of last decade's housing boom, when Bay Area transplants and local buyers gravitated toward ever larger and more expensive tract homes.

Many of these houses were built in new developments far from jobs and shopping, and required long freeway commutes.

In response, the regional "Blueprint" project adopted by the Sacramento Area Council of Governments urged a move toward denser, urban-style developments close to jobs and public transportation.

The regional planning agency suggested developments such as the Ironworks lofts project in West Sacramento and Capital Village, a high-density mixed-use development in Rancho Cordova, should be the wave of the future.

The infill projects have proved popular with buyers such as Matt Dominquez, a 39-year-old technology consultant, who said his 1,200-square-foot home at the Ironworks allows him to walk across the Tower Bridge to urban amenities.

"It's suburban urban," Dominquez said. "I feel like I'm in the suburbs but can walk to Old Sac. I can walk to downtown. It's a small taxi ride to bars and restaurants."

Large homes proliferate over decade

A report released late last year by the Urban Land Institute contended that Sacramento and other metropolitan areas around the state had an oversupply of classic subdivision housing, when buyers would likely would want denser, more urban-style housing near transit, jobs and nightlife.

Some say that's still the case.

"I don't see anything that's going to throw that general trajectory off," said SACOG executive director Mike McKeever. "There are decisions made by developers that look like they're running counter to the trend, but I think if you put the whole puzzle picture together, they're more the exception than the rule."'

Still, the region's love affair with spacious, suburban living has deep roots, and may not be so easily shaken, some housing experts said.

The push toward larger homes is a trend that has played out nationally since after World War II, retreating only when economic downturns pinched household incomes, according to figures from the U.S. Census Bureau.

In the early 1970s, the average size of a house was 1,660 square feet. It gradually rose over the decades as people sought more bedrooms and bathrooms, and peaked in 2007 at 2,521 square feet.

The recession knocked back the average home size to 2,392 square feet by 2010. By 2011, it had crept back to 2,480 square feet.

In the Sacramento region, the last decade brought monumental growth in large homes. The number of local houses with at least five bedrooms more than doubled from 2000 to 2011, going from 17,900 to 41,800, the latest census figures show.

A lot of that growth happened in Placer County, where about 12,500 homes have at least five bedrooms, roughly triple the number from a decade ago.

In 2007, when the trend peaked in Placer County, new single-family homes averaged roughly 2,800 square feet of living space, assessor's records show. By 2010, that average had fallen to about 2,415 square feet.

Now it's starting to rise again. The average square footage of new homes built in Placer County last year was 2,560 square feet.

John Orr, president of the North State Building Industry Association, said the trend toward bigger houses isn't hard to understand in today's lower-priced housing market. He compared it to Americans' appetite for big vehicles when gas prices are cheap.

"When we had huge price spikes in gasoline, we tended to go for smaller cars," Orr said. "When prices came down again, we tended to go for larger cars."

"It's kind of how we are as a population. We're driven by price," Orr said. "If we can afford the larger car, and we can afford to operate it, we tend to go for it. If we can afford larger homes on larger, more-spacious lots, we tend to go for it, too."

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