The Mansion: A Thing of The Past? - Real Estate and Technology News for Agents, Broker

The Mansion: A Thing of The Past?

The recession has changed home buying, possibly for good. The days of consumers investing in the largest house possible and banks loaning big time mortgage dollars is over, according to an Inman News article by Steve Bergsman.

photo credit: black.stilettos

Consumers can't qualify for big mortgages anymore, so home buyers are looking for what they need in a house, not necessarily what they want. "Homebuyers are purchasing because of how they intend to use the home, on the basis of what they need. They are treating their home more like typical consumer goods rather than investment goods." said Kermit Baker, chief economist with the American Institute of Architects.

Homebuilders around the country report that "the median-sized home being built today is smaller," reported Paul Bishop, vice president of research for the National Association of Realtors. "And our survey of homebuyers indicates that as well. People buying new homes today tend to purchase slightly smaller homes than homebuyers of even a few years ago."

"Some 40 percent to 50 percent of home sales are going to first-time buyers," said Bishop. And first time buyers generally purchase smaller homes. This also means that there are more trade-ups in today's market, but not to trade up to a huge mansion. "The shift to smaller homes could be long term," Baker suggested. "If you look back at what really caused the increase in home size, I'm guessing we're not going to see those factors again."

Read the full story at Inman News.

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Posted on January 25, 2011 13:07:51 by Blog Author