With the declining housing market, home builders across the country are faced with a problem. The homes they have been building are no longer selling. Buyers’ tastes in homes have changed and home builders have to adjust their plans to meet the new needs of the consumer. 

 

First, builders have to reduce their current inventory of homes they have already built. This usually means price cuts. New developments are often seeing a base price decline between phases. Many people who purchased homes in the first phase of a development are now seeing their exact same model selling for thousands less in later phases.

 

After the builders have reduced their inventory, they are focusing on building smaller homes. With tougher financing requirements, buyers are looking for smaller, lower priced homes. 

 

According to Kelly Evans of the Wall Street Journal, “over the past three decades, prosperity and a demand for space to accommodate home theaters, offices, gyms, and palatial kitchens has pushed up the average size of newly constructed single-family homes by nearly 45 percent even as the size of the average family has declined.” The US Census Bureau reported that the median square footage of a single-family home in 2007 was 2,248, up from 1974’s median of 1,560.