Change is strange. It often comes in completely unexpected forms. It seems obvious after the fact. But no one imagined it ahead of time.
Homes and home prices may be a good case in point.
Readers sent anecdotes about their experience with Texas home values in response to my recent column about the amazing growth of home prices in Dripping Springs.
Scan the headlines about home prices across the country and the broad theme is clear: “What goes up must come down.” The most popular word associated with home prices is “bubble.”
In Texas we have lots of experience with real estate busts, so the notion of declining home values isn’t far-fetched. It’s a historical reality.
The alternative to ‘smaller’ home prices may be small homes
But our future may not be that simple.
Why? Because our feelings about living space are relative. They aren’t fixed. They change with what we are doing.
Let’s consider some examples.
Tiny Homes. While developers continue to favor building McMansions on postage-stamp lots, enough people are going minimalist that building “tiny homes” has been called a movement. Built on a small trailer bed, these structures usually provide around 150 square feet of living space. They can be slipped into the tiniest openings in backyards. Needless to say, they cost a lot less than typical new homes.
Live in one and it is almost certain that shelter won’t be the largest single expense in your cost of living.
Park Models. These homes have no more than 399 square feet of living area because that is the maximum size of an RV for tax purposes. Basically, they are an RV built to look and feel like a small house. Typically, they have a bedroom and bath plus a living/dining area. Some have loft sleeping spaces.
Both kinds of houses are now represented by the American Tiny House Association, an indication this is more than a passing fad.
RVs. Since the Covid-19 pandemic began, recreational vehicle sales have reached new records. The most recent sales report on the RV Industry Association website shows a 50.8 percent increase in total RV shipments year to date through September over the prior year period.
While most RVs are used for recreation and vacations, a growing number of people are living in them fulltime. Some do it because their work is mobile and requires frequent moves. Others do it because it reduces their cost of living. And others do it to retire from the work of housekeeping, if not retire altogether.
When you have less to take care of, you have more time for everything else.
One indication of the popularity of non-traditional housing is a real estate investment trust that has built a nationwide collection of RV parks, manufactured home communities and marinas. Equity Lifestyle Properties (ELS) now operates 434 properties ranging from the Meridian RV Resort in Apache Junction, Ariz., to the Cortez Village Marina in Cortez, Fla.
Shrinking the conventional home building industry
Manufactured Homes. Many people look down their noses at manufactured homes, but they cost a fraction of what conventional stick-built homes cost. Add the shrinking household size of an aging nation and they look even better.
Still further out on the limb of imagination, what if all these manufacturing developments are just steps toward shelter becoming a new type of appliance? It could happen.
While the focus of the conventional housing industry has been on building ever larger houses, it’s just possible that today’s larger houses will be tomorrow’s white elephants, remnants of a bygone era that are no longer relevant to the way most people live. Skeptics should consider our automobile industry. Its imagination, for decades, was limited to building ever larger automobiles – even as Japan and Europe took chunks of market share with smaller, but better designed, vehicles.
Big mistake. Today, General Motors and Ford have less than 30 percent of the U.S. auto market.
Think different, live different
Think living in a small space is crazy or impossible? Then meet Teresa O’Kane and Scott Soper. I met them last month, after docking at the St. Michaels Marina in Maryland. I was sailing with two of my brothers aboard Wind Song, my recently purchased 32-foot Catalina sloop. (It, by the way, was a comfortable live-aboard for the three of us. Two people could live aboard full time.)
Teresa and Scott were aboard Green Eyes, their 26-foot Nordic Tug. It has, by her count, about 150 square feet of living space and has been their home for 13 months over the last two years of exploring the Great Lakes and East Coast. She told me that if she had ever wished for a larger boat, it was more for the sake of dealing with rough seas than more interior space. You can read her blog.
As always, the biggest space is in our heads. The future will unfold from it.
Related columns:
Scott Burns, “The Clank and Beep of Texas,” 11/07/2021 https://scottburns.com/rapid-growth-in-texas-comes-with-a-clank-and-a-beep/
Scott Burns, “Staying Afloat and the Rush for Stuff,” 7/3/2021 https://scottburns.com/staying-afloat-and-the-rush-for-stuff/
Sources and References:
Nordic Tug 26: https://www.nordictugs.com/nt-26/
St. Michaels Marina: https://stmichaelsmarina.com
Teresa Okane blogspot: http://teresaokane.blogspot.com
Adela Muresan, “Who lives largest? The Growth of Urban American Homes in the Last 100 Years,” Property Shark, 9/8/2016 https://www.propertyshark.com/Real-Estate-Reports/2016/09/08/the-growth-of-urban-american-homes-in-the-last-100-years/
Origins of “white elephant.” https://www.historyextra.com/period/victorian/why-do-we-say-white-elephant/
Merriam-Webster dictionary definition of “white elephant.” https://www.merriam-webster.com/dictionary/white%20elephant
“6 Big Reasons the Tiny House Movement is on the Rise,” https://www.kwsanantonio.com/news/6-big-reasons-the-tiny-house-movement-is-on-the-rise/
American Tiny House Association, https://americantinyhouseassociation.org
Park Model definition: https://www.compactcottages.net/tiny-living/park-model-home/
RV Industry Association: https://www.rvia.org/news-insights/september-rv-shipment-report-sets-new-single-month-record
Statista, Selected automakers’ U.S. YTD market share: https://www.statista.com/statistics/343162/market-share-of-major-car-manufacturers-in-the-united-states/
Equity LifeStylePropertieswebsite: https://www.equitylifestyleproperties.com
This information is distributed for education purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, or service.
Photo: Scott Burns 2021
(c) Scott Burns, 2021