She muttered derisively as she perused the Sunday paper. Amazingly, she wasn’t even reading my column.
Rather, she was looking through the 2008 Parade of Homes guidebook, in which the lowest-priced single-family home this year cost $281,076. The lowest-priced townhome, this year, was $169,900.
“Who’s buying these things?” she asked as she looked at the “middle of the road” selections, around half a million bucks. Well, I suggested, maybe the people working for LGH.
And the trend - both in the Parade of Homes and in the home market here in general - has long been towards larger, more expensive homes. I’m sure individual builders would take umbrage at the term “McMansion,” but in fact a whole lot of 2,500-4,000 square foot homes with large open foyers, 3-car garages and more have been built in Lancaster County in recent years. Really, that’s the only type of home that’s been built in Lancaster County in recent years, not counting townhomes; middling home buyers (and here I’m talking those who don’t want to spend more than $250,000 but would prefer to keep it at $200,000, even below) basically have two choices: They can buy one of those townhomes. But if they want a single-family detached home, they can’t get a new one, because new ones in that price range simply aren’t being built. So they’ll have to settle for an older home in an older neighborhood.
And builders/developers will give you the whole laundry list of reasons why this is - why those Parade of Homes prices should keep going up and up and up, year after year.
But the housing market is obviously changing, in reaction to the crisis. As is often the case, it happens first in California:
During the bubble, KB Home, like many other big builders, blew up its old-line business by going ritzy and building expensive houses. Now KB is among the first homebuilders to recognize the error of its ways, and it is returning to its roots as a purveyor of low-cost, smaller homes. In some cases KB is even using the same façades from the go-go years and then shrinking the house that lurks behind them to be half as deep - and about half as expensive. “If I had to write a headline for housing, it would be back to basics,” says Broad. “The right thing to do is just what KB is doing: build starter homes that compete with rentals.”
Entry-level buyers, the piece goes on to say, comprise a full 30 percent of the homebuying market. Well, they’re obviously not buying expansive, $500,000 mini-mansions, and now, in our new era of forced austerity, people are willing to trade the “cathedral ceilings, formal dining and living rooms, and fancy wrought-iron railings” for lower prices.
Trends always take, what - two years to filter down to Lancaster from New York and California? In any event, be interested to see if the lowest-priced homes in next year’s Parade reflect the conventional wisdom - or the new ecconomic reality.
