Consumers are shifting preferences to condos, apartments, and small homes, leaving an estimated 40 million big homes unwanted, according to UT San Diego:
Relying on developers’ surveys, Chris Nelson, who heads the Metropolitan Research Center at the University of Utah, said 43 percent of Americans prefer traditional big, suburban homes but the rest don’t.
“That means we are out of balance in terms of where the market is right now, let alone trending toward the future,” he said.
He estimated that this demand suggests a need for 10 million more attached homes and 30 million more small homes on 4,000-square-foot lots or less. By contrast, demand for large-lot homes is 40 million less than currently available.
“Is it any wonder that suburban homes are plummeting in price, because there is far less demand of those homes than in the past,” he said.
Shyam Kannan, director of the economic development practice at the Robert Charles Lesser & Co. consulting firm, said his company made its money in recent decades in advising builders of suburban master-planned communities. But that emphasis is shifting with consumer patterns.
“Many master-plan developers realize golf courses are dead and the town center is in, and they’re working as hard as they can to deliver it,” he said. “Unfortunately, they’re bumping up against entitlement problems on the public side more often than not… We need to push public policy to keep up with the builders.”