Styled, Staged & Sold

Bringing you the latest home design and staging trends. From REALTOR® Magazine.

KB Homes Tries Tiny Homes to Attract Buyers

By Melissa Dittmann Tracey

The softening housing market is causing builders to start downsizing homes to help shed high construction costs and offer a more affordable home to cash-strapped buyers. KB Homes recently announced its plans to build 880-square-foot, two-bedroom, one-and-a-half-bath houses in three suburban Houston areas. The homes will sell for $64,000.

Depending on how well the homes perform, KB plans to build them in other cities as well. CEO Jeffrey Mezger says the move is a return to the company's post-World War II roots, when small homes were standard.

"Any time there's been an age of exuberance and the economy turns, people get back to 'What do I need?' rather than 'What could I buy?'"  Mezger told Business Week for a short article on the smaller homes (Read: "Tiny Homes for Tough Times").

The National Association of Home Builders reported at its International Builder Show in January an overall downsize of new homes. In fact, NAHB said it's the first significant decrease in new home sizes since they've started reporting: 2,629 square feet to an average of 2,438 square feet. NAHB expects the trend to continue.

Do you think smaller new homes will be the answer to get buyers off-the-fence? What is selling in your markets: The larger or more compact homes?

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REALTOR® Magazine is the official magazine of the NATIONAL ASSOCIATION OF REALTORS® and the business tool for real estate professionals.