I loved this blog from our friend Jay Vorhees at JVM Lending. It covers the trend in real estate towards smaller homes. I have been thinking of doing a blog on tiny homes and this may be the impetus to sit down and write about that trend! With millennial buyers angling that way and boomers finally wising up and heading that way too, the market for large houses is changing. Read on:
I hike for five or six miles every weekend in the hills around one of the Bay Area’s most high-end housing developments. The homes are huge, stunning, and fun to see, but the best part is the extremely elaborate backyards with vineyards, gazebos, massive pools, outdoor kitchens, terraces, fruit trees, play sets, sport courts, and immaculate landscaping.
The cost for those yards alone is often in excess of $1 million. And this is what I find most interesting – in over nine years of hiking, I have seen people in those backyards maybe five or six times; despite their beauty and allure, the yards are literally devoid of human beings.
I know several families who live in the development, and I know exactly why they are never in their backyards. With sports practices, games, private coaching, tutoring, volunteering, homework, social obligations, etc., they are far too busy to ever find time to venture into their outdoor paradises.
So, that is point #1 – families looking to buy their ultimate dream home might do well to remember that they may be far too busy to enjoy it. Point #2 was illuminated in a recent WSJ article called A Growing Problem In Real Estate – Too Many Big Houses.
It turns out that far too many baby boomers built monstrous dream homes that they no longer want or are able to take care of. According to the article, in February in Scottsdale, AZ alone, there were 390 homes on the market at prices in excess of $3 million. The market for large homes is dwindling because more and more boomers are wising up and moving to smaller homes with much less maintenance, and younger buyers aren’t interested in the large homes either.
Another problem is that we old people like earth tones, crown moldings, and other styles that younger buyers hate, only making boomer homes that much less appealing to younger buyers (when my wife Heejin and I stay in modern AirBNBs, I drive her crazy with my non-stop complaining about the concrete floors, stark colors, and what seems like ridiculously cold decorating to me; and don’t even get me started about those silly little pedestal sinks…).
Anyway, if you have a client looking to build or buy their monstrous dream home, you might remind them that they either might be too busy or too old for a huge home.
Many of those boomers in the Walnut Creek area bought those big homes with big yards and as the kids grew up, they have sold and moved downtown to places like the Mercer on California where they can lock up for three months, not worry about a yard and travel or just walk downtown have dinner and a glass of wine and walk back home…more to come for that future blog!