Demand for smaller new homes expands during real estate's hard times

The days of the great space and energy guzzling American McMansion may be numbered.

As concerns over the housing market deepen and energy prices continue to rise, the size of the typical new U.S. home is shrinking, according to the American Institute of Architects.

"The recent weakness in the housing market forces households to be more sensitive to housing affordability concerns. Coupled with rising home energy costs, this encourages many to rethink their overall space needs," said AIA Chief Economist Kermit Baker.

"While smaller homes may be a short-term response to economic conditions, there are signs that we may be at the beginning of a longer cycle where house sizes stabilize or even decline," Baker predicted.

The quarterly AIA Home Design Trends survey found that several interior spaces are shrinking in the typical American new home, from total square footage of living area to informal and open areas and volume spaces, such as cathedral ceilings. Living space allocated for finished basements and attics appears to be holding its own.

To address the needs of an aging population there is an emphasis on greater accessibility throughout the home, the AIA survey shows.

"Outdoor living elements continue to be extremely popular and include traditional features such as decks, porches and patios, with the addition of outdoor 'rooms' and cooking areas as a more recent trend," Baker noted.

"Lately, data shows a preference towards extending the home through blended indoor/outdoor space," he said.

To add value and improve their properties, homeowners also are also investing in landscaping.

"There is still some interest in upscale landscaping elements, but there is also growing demand for low-maintenance landscaping options due to water conservation issues," Baker said.

The green theme in new housing also can be found in the condominium market, where more and more developers are seeking LEED ratings for their buildings. The U.S. Green Building Council's acronym stands for Leadership in Energy and Environmental Design, a hot designer label for trendy mid-rise and high-rise developments.

In Chicago, such major South Loop condominium developments as Lexington Park, X/O Condominiums, eco18 and Lakeside Lofts are either seeking various LEED designations or offering green options.

The LEED brand ranks projects on four green levels -- certified, silver, gold and platinum -- and the designation is growing by leaps and bounds. In 2008, some 10,250 new home projects have registered for the council's consideration, compared with only 3,100 in 2006, the first year of the pilot home-rating system.

The Home Front, Don DeBat's weekly real estate column syndicated by DeBat Media Services, unravels the complexities of home buying, mortgage shopping, homeownership, renting, building, renovation and remodeling. For more home-buying information visit his Web site at www.dondebat.net.