real estate

What's ahead for the housing market?

New homes to be compact, energy-efficient

As the population ages, again due to the baby boomers, smaller homes may be in greater demand. As Melman points out, empty-nesters need one spare bedroom for visiting grandchildren, not four bedrooms for growing teenagers. Smaller homes are also cheaper and easier to maintain and should be less costly to heat and cool.

An NAHB report, "Home of the Future," states that the size of new single-family homes reached a 35-year record of more than 2,400 square feet in 2006. But that growth spurt isn't expected to continue into this decade. Instead, the average size of a new home will range from about 2,300 to 2,500 square feet in 2015.

Myers says new houses will be more compact, more efficiently designed in their use of space and richer in amenities inside the home and nearby in the neighborhood. These trends are seen as another likely result of an aging population and the push toward more efficient land use.

"The new house will be an efficient house that's easy to live in for one or two people only and may be located in more dense configuration, so people can walk to nearby amenities," he says.

New homes also will be more energy-efficient in terms of windows, doors, insulation and even site planning due to concerns about climate change and the need to reduce energy consumption and emissions.

Homebuyers generally are willing to pay about 2 percent to 2.5 percent of the purchase price of the home for greater energy efficiency, Melman says. After that, the willingness to pay more for green-built features wanes.

That desire for energy-efficiency doesn't necessarily mean current homeowners should invest heavily in such upgrades in 2010. Instead, Myers suggests, homeowners should study up on new technologies and be ready to adopt them when the time -- and the price -- seems right.

"I don't think there is a big rush because the technology keeps evolving," he says.

Buyers also might start to think more about utility and transportation costs when they purchase a home, Melman suggests.

"If you look at prices and interest rates, affordability has never been better for a long time. But people are also looking at the operating costs and energy efficiency of a home. You want to make sure you can afford the mortgage payment, but you also don't want to have $1,000-a-month utility bills," he says.

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