Trends in new construction have pointed to American’s changing attitude about building big, new houses. Perhaps that is just a short term reprieve of the larger houses because of the recession. However, I think many people need to give thought to how much they should buy when it comes to housing.
The costs to operate that house are only going to go up even if oil and gas are in a bubble. With the increasing likelihood that the Fed will have to inflate its way out of our financial mess and given that there are a lot of entities that want higher gas prices, expect to pay a lot more for your gas and electric bill for your house. Also expect to pay higher property taxes. And if you own an older house, especially one built before 1978, expect to pay significantly more money to have any work done on your home due to the lead ruling issued by the EPA.
Did I forget to mention water? I know we live in Minnesota and it appears that there is water everywhere, but rest assured, at some point in the near future, it will be cost prohibitive to water your lawn. I think there might be a fantastic opportunity for a landscape company to come up with a relatively cost-effective way to hard scape an entire yard. Certainly something like the turf found at any top rated high school football field might work for many lawns.
For the older 4000-5000 square foot homes that are 20-40 years old and out of date, the cost to improve all of that square footage will become cost prohibitive for many future buyers. Discount accordingly.