The tract homes being built today are twice as large as they were 30 years ago. These super sized homes have taken over many suburban areas. Priced where a typical middle-income family in North Texas can afford to get in.
Are families buying more home than they can afford? Take a middle-income family buying a 3500sqft home today. For this article we'll call them the Walker family. The Walkers are so happy to be buying a home. The last thing on their minds is the future maintnenance costs or losses from depreciation.
The North Texas area (Dallas, Fort Worth and Arlington) like the rest of the country has seen a phenomenal growth in housing and population. The number of new single-family homes constructed in 1980 was 33903, and in 2005 it increased to 59895 units.
Parcles of land long overlooked by past developers are rapidly being eaten up for new housing additions. These additions are geared toward the lower-middle to middle-income families. Houses range from $85k to $130k for 1800sqft to 4000sqft, often marketed with some type of $0 down promotion. The land is commonly treeless and usually borders the highway.
These builders generally offer 3 or 4 floor plans. The homes are either square or rectangle with the second story being exteriorly identical to the first. So, this block home can be "customized" by attaching a front or back porch cover in various configurations to make it look different from the neighbors'. The new home owner is allowed to choose from several builder grade carpets and tiles for further customization.
Now back to the Walker family. They have purchased a 3500sqft 2-story home for $120,000 and $0 down. The home has builders grade everything, carpet, A/C, water heater, sprinkler system, etc... Oh, and let's not forget 1 new tree in the front yard.
Move forward 8 years. The carpet needs to be replaced, the A/C is on the blink, and the sprinkler was built with low grade pipe and has begun to crack. These repairs begin to stress the budget. Also remember everyone in the neighborhood will be facing the same problems.
The Walkers look into selling and quickly discover the house has not appreciated like they thought. In the next neighborhood new tract houses are being built for a similar price the Walkers are trying to sell their 8 year old home for. Don't forget the $0 down deal. They have no equity to fall back on. They are in a bad position, upside down in a house in need of repairs.
These large homes will cost much more to repair. Remember that the cost of materials per square foot is the same for a small or large house.
As inflation continues people have less money available to maintain their current home. It is wiser to buy a smaller higher quality home in an established area. I have a feeling that in the future we will see investors pick up these monster homes and renovate them into small apartments or maybe even elderly care homes.
