At annual builders’ show, small is in

Among the trends highlighted at the International Builders’ Show, more Americans are saying goodbye to McMansions and are buying ‘right-sized’ homes instead. There’s also high interest in green elements, organization, fewer luxuries and practical appliances.

These days, a bigger home isn’t always a better one: Recent research suggests that homes being built today are getting smaller.

The average size of homes started in the third quarter of 2008 was 2,438 square feet, down from 2,629 square feet in the second quarter, according to the U.S. Census Bureau. Similarly, the median size of homes started in the third quarter was 2,090 square feet, down from 2,291. The statistics confirm what the housing industry has suspected for a while.

“We’ve been hearing for a long time ‘Why is the home size not declining?'” said Gopal Ahluwalia, vice president of economic research for the National Association of Home Builders. He spoke about the trend at the International Builders’ Show in Las Vegas this week. Anecdotally, he had heard smaller homes were being built as housing prices tumbled and the economy began to weaken. Still, “we never had data to back it up,” he said.

Read:  Builders see housing market bottoming out

Gayle Butler, editor-in-chief of Better Homes and Gardens, said that for many homeowners, it is not so much a matter of downsizing as “right-sizing,” giving up big homes with unused space and buying a home that better fits their needs.

“Either by necessity or choice, they’re willing to take a step back from the McMansions,” she said at the Builders’ Show. In fact, according to a survey conducted by the magazine, 32% of participants said they expected their new home to be either somewhat smaller or much smaller than the one they already live in, she said. The magazine’s online study involved 733 potential new-home buyers.

Builders are responding to those consumer desires. According to the NAHB, 88% of builders surveyed in January said they are building or planning to build a larger share of smaller homes. And 89% said they’re planning on building more lower-priced models.

As homes get smaller, homeowners are looking to make the most of the space they do have. Butler says she is seeing more interest in “Wii-sized spaces” — family rooms that are flexible enough to accommodate a variety of activities, from video games to fitness systems. Outdoor spaces aren’t being wasted, either, and outdoor kitchens and entertaining areas continue to rise in popularity, she said.

According to the Better Homes and Gardens study, top priorities in a new home include an affordable price, natural light and comfortable family gathering places. The era of supersizing may be ending, Butler said, with buyers looking for a home that is “right-sized, organized and economized.”