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Larger, custom-built homes appear to be making a comeback after languishing as white elephants during the recession, according to Smart Money.
Sales of new homes rose nearly 10 percent from a year ago and home builders say it's the bigger homes with custom details that are accounting for much of the increase. The National Association of Home Builders reports that in 2011, custom homes accounted for nearly 30 percent of housing starts, compared with 19 percent in 2005.
Does that mean homebuyers are again yearning for more square footage and fancy fixtures? Yes, in some cases, demand is causing the spike in numbers. But there are other factors to consider: While the total number of custom-built homes is down from the housing boom, the number of modest new homes is down even further, making the more luxurious homes a larger share of the overall market. The wealthy are also in a better position to meet stricter lending standards for a mortgage, so are more likely to buy while mortgage rates and home prices are relatively low.
U.S. Census figures show that the average size of a home shrank by 3.4 percent during the recession, to 2,382 square feet. In 2011, it rose to 2,505 square feet. But size isn't the only issue. Homebuyers want more custom features, such as double ovens and crown molding, one luxury builder told Smart Money. "Buyers are putting a lot more attention to detail -- they're not just buying a big box."
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