The home of the future: smaller, simpler, more affordable

Marianne Cusato was busy designing cottages for people displaced by Hurricane Katrina when requests started pouring in from developers, builders and homeowners across the country begging her to create a similarly compact dwelling for them.

"I was very focused on disaster housing and the small-house movement came to me," Cusato told WalletPop.

Though Cusato's 300- to 1,800-square-foot Katrina Cottages -- now for sale at Lowe's -- are an extreme example of the smaller-is-better mentality, the movement appears to be more than a fad, especially now that the economy has tanked.

A slew of surveys shows that homeowners are looking to slim down, hoping for less space to heat, cool and clean, and cheaper mortgage payments. A recent CNN poll found 69% of respondents felt homes had gotten too big and Kermit Baker, an American Institute of Architects economist, reported in October that while people want a home office more than ever (reflecting in part the growing number of self-employed and telecommuting workers), special-function rooms such as home theaters, exercise rooms, guest wings and three-car garages have become less popular.

Consumers are also abandoning some of the excesses that had come to define the modern home before the housing bubble burst: living rooms in addition to family rooms, big master bedrooms with big master baths, walk-in showers that are adjacent to standalone Jacuzzi tubs, pantries the size of closets and closets the size of bedrooms.

Soraida Oquendo of Shrewsbury, Mass., is among those homeowners desperately seeking to downsize. Her 4,369-square-foot home, now for sale, includes a full basement and a pool -- both amenities that seemed perfect when her two children still lived there. But now she and her husband yearn for a house that's half the size and more affordable. The economic downturn, she says, has hit their liquor store business and the family's finances.

"I'd like something only one floor...the most three bedrooms. Bathrooms? Two and a half would be fine. No big dining room. Something very simple and easy to clean," Oquendo said.

Robert Lang, director of Brookings Mountain West, an urban development research partnership between the Brookings Institution and the University of Nevada, Las Vegas, sees the downsizing trend as a pendulum swing from just a few years ago. The sociologist describes the previous upsizing of housing as "the Tuscanization of wealth," in which Tuscany-style homes grew ever larger as they were layered with add-on after add-on. "There were oversized entry halls, grand staircases," he told WalletPop. "Their purpose was to demonstrate status."

While the Oquendos are more traditional downsizers -- empty-nesters ready to move on -- Christine Harmel of Austin, Tex., is part of the new wave of less-is-more-leaning homeowners. Harmel, who does public relations for green companies, moved last year from a three-bedroom, three-and-a-half bath home in Charleston, S.C., to half of a 1,200-square-foot duplex.

The hardest thing to give up was the kitchen, she said, since she likes to entertain. Now she plans parties for good weather so she can hold them outdoors -- and warns people not to come if it rains.

A National Association of Home Builders survey found the downsizing trend started back in 2007, when potential buyers were asked what trade offs they would prefer if costs exceeded their budget. In 2007, 58% said they would choose a smaller house with high quality materials and amenities over a bigger home with fewer amenities. In 2004, only 37% said they would make that choice. During that period, the desired square footage dropped from 2,426 square feet to 2,292.

"The living room is the most likely to disappear when the buyer is forced to choose," Stephen Melman, the NAHB's director of economic services, told WalletPop. Also on the chopping block: giant kitchens and large master baths.

A recent Wall Street Journal article said builders have become so convinced of the trend that they are making some of the choices for consumers, drawing up blueprints without the grand foyers and staircases, forgoing fireplaces and reconfiguring garages so that cars park end to end instead of side by side.

The Katrina designer, Cusato, has responded to the downsizing movement with the soon-to-be unveiled"New Economy Home" models. "I'm shifting from natural disasters to man-made disasters: the economy," she said.

At 1,676-square feet, Cusato's floor plans offer several options, including a downstairs suite that can ebb and flow with a family's needs, starting out as a family room or office, morphing into a rental or in-law housing and perhaps later a downstairs master bedroom for retired homeowners. Cusato even suggests it could allow a divorced couple to continue to share the house if finances demanded it. What you won't see in Cusato's blueprints are large hallways, giant master suites, media rooms and her least favorite luxury: the Roman tub.

The smaller-is-better movement isn't just a passing fad, said the NAHB's Melman. Baby Boomers are now empty nesters and they simply don't need as much space. Combine that with a recession and it appears this trend has legs.

"The trend of increased floor area over the past 35 years declined slightly during previous recessions in 1975, 1980-82 and the early 1990s. But this time it could be more permanent," he said. "The depth of the recession and anticipation of increased energy costs combine with demographics this time."
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