REALTOR® Magazine-Daily News-Home Sizes Shrink to Lure Buyers

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Daily Real Estate News | October 13, 2008 | Home Sizes Shrink to Lure Buyers
Home builders are reducing the size and options available to appeal to buyers with less money to spend and who are facing a harder time getting financing.

Los Angeles-based KB Homes had shrunk its homes from 3,400 square feet, selling for $450,000, to 2,400 square feet selling for $300,000 to appeal to buyers. Now, it's shrinking its homes yet again--1,230 square feet priced at about $200,000

Other builders, including Warmington Homes and John Laing Homes, have taken similar approaches.

“We're getting back to more the way things were historically, kind of undoing the excesses, not just from a price perspective but home size and (fewer amenities)," says Nishu Sood, a Deutsche Bank analyst.

The new KB Homes aren’t just smaller, they are more efficiently designed, says Steve Ruffner, president of KB Home's Southern California Coastal Division.

"You could have a three-bedroom, 2,500 square-foot single-story home and all you had was wide hallways and bigger rooms. It wasn't really giving [buyers] the utility," Ruffner says.

Source: The Associated Press, Alex Veiga (10/10/08)