March 18, 2005

Moving Up

By Jane Aldinger
– Memphis Business Journal –

Home buyers have changed their attitude when it comes to what they need in a house. The dream home of a 1950’s couple pales in comparison to the media rooms, three-car garages and mammoth kitchens that a 21st century family can’t live without.

The median size of houses built in the U.S. has increased 135% since 1950, according to the U.S. Census Bureau. In 1950, the median home size was about 900 square feet, but that increased to 2,123 square feet in 2003.

Local home size numbers mirror the national trend. The median square footage of a Shelby County home has increased by about 600 square feet from 1970-2005, according to the Shelby County Assessor of Property’s office.

The median size of a Shelby County home was 1,637 square feet from 1970 – 1980; 1,881 square feet in the 1980s; 2,055 square feet in the 1990s; and 2,235 square feet from 2000-2005.

The definition of a large home in Shelby County is approaching 6,000 square feet, says Hank Akers, owner of Hank Akers Co. LLC.

“Beyond that satisfies greater needs for entertainment or maybe ego.” He says. “(People building) 10,000-12,000 square feet would find it hard to justify from a need point of view.”

Mack Andrews, Memphis Area Home Builders president and owner of Mack Andrews, Inc., says the definition of a large home has jumped to about 5,000 square feet. Another factor contributing to the construction of larger homes is the low interest rate.

“That kind of driving the market, the low interest rate,” Andrews says. “The people that choose to finance them can do so with a pretty low monthly payment.”

Infill zero-lot developments average about 4,000 square feet per home, but moving further east on Shelby County the homes get even larger; says Doug Dickens, vice president of special residential projects with Boyle Investment Co.

“Out East where you’ve got some good acreage, I would say 7,000 feet is pretty much where they start,” he says. “In the upper end, a fairly good size house is 6,000-7,000 feet and they go up from there.”

Most builders correlate, larger homes with more expense and amenity driven construction.

Andrew builds houses in all size ranges – from starter to larger homes. Andrews has noticed that the demand for larger, and thus more luxurious, homes has gone up in the Memphis area thanks to the wave of baby boomers who can afford to buy whatever kind of house they want.

Akers says home size has increased, depending on an individual’s point of reference.

“Certainly, in general, I would say that the size of homes has increased over the last 10 years and certainly the price range, too – not just accounting for inflation but accounting for amenities folks want in their homes,” he says.

These new homes are located throughout the county, from East Memphis to the Raleigh-LaGrange and Collierville areas, Andrews says.

Many of the larger homes are being built on tear-down lots and infill development in East Memphis. River Oaks, specifically the Cloisters and Normandy Park subdivisions, the Raleigh-LaGrange area of Shelby County, Collierville and Germantown are all hotbeds for large, new home construction, Akers says.

Parents are demanding more space for their children and themselves, even if their children have moved away from the nest, Andrews says, and studies and home theater rooms are gaining popularity in new homes.

Akers names amenities like antique beams, stone flatwork, wider and more specialized hardwood flooring, upscale custom cabinetry, commercial type kitchens and outdoor cooking equipment.

Dickens references the growing number of bathrooms in homes and the request of additional rooms, like media rooms, as a reason for the larger home construction.

It’s amazing what we think we have to have now, “he says. “When you add all that together, it’s unbelievable what people are asking for houses now and what people can afford.”

Why people are building large homes and why the average home size has increased so rapidly can be determined looking at a number of factors. Akers says people are using residential real estate as an investment vehicle more frequently, even though that sentiment has tapered off in the last one or two years.

The Memphis community is also more affluent than it was just a few years ago.

“There’s just more folks doing well in business,” Akers says.

“We’re fairly affluent, and I think that’s the reason why,” Dickens says.

A 900 square foot house was sufficient in the 1950’s, Dickens says. Most were laid out similarly; one floor with a living/dining room combination, a galley kitchen and a hallway connecting one bathroom and three bedrooms.

“There was not such thing as a master suite,” he says. “There was no such thing as a kitchen keeping room.”

That progressed to a suburban, two story model that had all four bedrooms upstairs, and about late 1970’s or early 1980s, the master suite came into play. Now home buyers are taking sizes a step further.

“Recently, the market has started to demand a second bedroom down or a bedroom office, a swing room over and above your master suite” Dickens says.

The large kitchen with an attached keeping room, or den, is becoming a large-home essential.

Garages have also evolved, from a carport or parking pad to garages that house three-five cars.

Dickens describes zero-lot line homes as responsibility free living,” and says large homes on small lots contained by a wall or gate are being built all over Shelby County. People are looking for the same size home without the hassles of a yard and with more added security.

“They still want to be in the neighborhood they’re used to,” he says. “The houses are close together yet they’re still big, but they’re in those areas where they raised their kids.”