I recently spent the weekend with one of my former college buddies who is currently an accountant. The first reason this is significant is because he is your typical middle class American and secondly he had just moved into his second home which is much smaller than the first one he owned. I found it interesting as to how often he kept professing his love for his smaller house. This wasn’t surprising at all because I have noted that it is a phenomenon that is taking over the American real estate sector. More and more middle class Americans are moving from their bigger houses into much smaller ones. In this article, I seek to establish the reasons for this trend.
#There seems to be a shift in priorities for professionals
It was a common trend for young middleclass American professionals to want to upgrade their lifestyles whenever they moved to a higher pay grade. The often felt that their choices in real estate reflected their new status. Today however, this urge to impress others by showing your success through the things you own seems to be fading away.
#Home owners are beginning to make more informed decisions
If you ask anyone what qualifies as the home of their dreams, they will say the bigger the better. This is of course a response by someone who has not have a proper understanding of real estate. Middle class Americans are beginning to become more knowledgeable on issues of real estate and this is influencing their decision of moving into smaller homes. Bigger homes come with so much utility and overall maintenance costs therefore, within a short time your ‘dream home’ turns into a financial headache for you. With this knowledge, home owners learn that they would be more comfortable in a smaller home.
#Smaller homes have less debt and less risk
The beauty about real estate is that there are various online sources to guide you in terms of budgeting before you dive into a financial hole you cannot get out of. You can be able to assess how much you can afford to invest in real estate based on your net income, savings and current debt, which you use to calculate and know whether you can afford the monthly mortgage payments. When you do this math, you quickly realize that smaller homes carry much less risk and debt in comparison to larger homes.
#Smaller homes have less environmental impact
Environmental campaigns have become so successful that a number of middle class Americans are increasingly becoming more conscious about playing their role in environmental protection. Generally, larger homes require more resources and building material which means putting more pressure on the environment. Home owners therefore opt for much smaller homes which will require less resources and building material.
#Smaller homes are easier to re-sell
When moving into your home, generally you are never thinking that one day you will need to sell it. However, one of the rules of real estate investment is that your home is actually an investment. Therefore it is wise to have this in mind as you are purchasing a home. Based on market trends, it is much easier to sell as small home as opposed to a large one and this is something more and more middle class American home owners are becoming aware of.