“Simplicity is the ultimate sophistication.”
~ Leonardo da Vinci
If you were to drive throughout a typical suburban neighborhood in the 80s and 90s (and in some cases today), you would have seen sprawling, mass-produced McMansions noted for their lack of character and almost comical, overbuilt nature. The lots beneath them seemed to groan from the weight of these beasts and the endless amount of stuff contained inside their walls. America was in full-on consumerism mode, and everything that was bigger was better: houses, hair, heels, and horsepower.
But then a subtle gnawing of knowing began to awaken us.
We began to notice that owning a bunch of stuff did not make us any happier. Nor did the ginormous home and yard that were never-ending maintenance projects. The similarly large mortgage demanded two salaries, sucked away free time and quality time with family, and clicked into place a set of 30-year shackles.
We discovered we were paying thousands of dollars a year for someone else to house the stuff we couldn’t stuff inside our homes and garages any longer. We had forgotten what was even inside those storage units and made mindless trips to push older stuff to the back of the unit so that there’d be room for the new stuff in front.
We felt the drag on our energy and psyches and started to look for solutions. We got crystal clear that we wanted greater self reliance, fewer costs, more time, and free-flowing energy. We wanted high design and sophisticated innovation in use of space and materials. Smaller felt better, more manageable, and fostered the movement to purge any and all stuff that no longer had use in our lives. Minimalism in all forms gained traction, and the tiny home movement was born.
Initially, many people who built a smaller home (let’s say 1,200 sf and under) looked to secluded parcels where living more independently (and even completely off the grid) was possible. Privacy and resourcefulness were of primary concern with homeowners seeking sites suitable for gardening, harnessing solar power, and collecting rainwater.
Over time, the demographic and interests of those seeking smaller homes have broadened significantly to include every age group and desired lifestyle. Now, many of those wanting a minimal, downsized life are looking to build in neighborhoods that were once the havens of larger homes only. This newer demographic is seeking self reliance with a twist of convenience to shopping, cultural events, restaurants, and nightlife.
And neighbors are starting to panic.
What will happen to the property values of the larger homes in a neighborhood where newer, smaller homes are being built?
According to Tom Horn, appraiser, there is nothing to worry about.
Horn notes in his blog, “Every area and situation is different, but for the most part, smaller homes in a neighborhood do not general affect the value of larger homes in a negative way just because they are smaller.” Appraisers are going to use comparables that are of similar size with similar features and amenities.
In fact, newer, smaller homes boasting high design and fresh approaches to landscaping may very well boost the overall values in neighborhoods. New construction (if done properly) brings new energy into an area and enlivens what may have been a stale section of the community. In fact, once new construction and renovation begin in an area, neighbors tend to get excited and follow suit. Soon, you’ll see other renovation projects launch, as well as efforts to spruce up and freshen properties. Further, those seeking to purchase in such areas will be heartened to see activity and new investment, and, therefore, will be more confident in investing there themselves.
There is one caveat, however. If you are the owner of a very large home in a neighborhood of predominantly small homes, you will have overbuilt for the neighborhood. Obviously, this is not a desired category for valuation. Having a solid mix of home sizes throughout the neighborhood, however, is (in my opinion) healthy and very desirable.
I believe we are in a fascinating new world of home building, and, more importantly, a new vision and set of approaches to building sustainable, healthy, and balanced lives. I do not have a concern that smaller homes negatively affect values in neighborhoods; in fact, I see them potentially driving a new definition of neighborhood potential and attractiveness in the marketplace.