Monday, January 26, 2009

Demand or Supply?


This article about the demand for smaller houses is a bit misleading. While there are some survey statistics reflecting people's 'mood' or inclination toward smaller homes and fewer luxuries right now in housing, that probably reflects the reality that has hit most people...they can't afford what they really want so they'll have to settle for what they need. Certainly there are many people who want to live in smaller homes, evidenced by the Small House Society. But more of the issue lies on the supply side...not the demand.


The misleading part is that the article does not mention that buildable land is harder and harder to find now that states are taking more control of land use, population growth, environmental impact and community planning. In many places recently passed state laws have severely restricted what land can be used for residential housing and development. So the only way for developers to make the same amount of money as they used to, is to build more houses per acre and agree to build only in locations where mixed use, retail and commercial development are also being built. That means that the demand for smaller housing may not be coming from the public, but is being forced on the public because of land restrictions. Where builders used to build one large house on 1 acre of land, they are now having to build at least four smaller single-family homes in order to be in compliance with state and local zoning laws and to stay in business. In some cases, the existing home prices reflect the value of the land much more than the value of the home.


What's the sacred point? Don't let articles like this or other outside sources tell you what you need or what you should want. It doesn't matter what's 'in.' What matters is how you honor God with what God has blessed you with...no matter how big or small.

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