With rising housing costs, higher interest rates, climbing energy expenditures and incomes that can't keep pace with inflation, the housing market may just turn towards smaller, more compact and affordable homes. Given the challenge of global warming and the rising costs of energy for heating and cooling, analysts are now saying that you could actually be much better off buying a smaller home. There is speculation that the current "average" size home (which is 2200 square feet) could become too expensive to carry and maintain.
In fact, the highest costs will be to cool your home, as global warming drives temperatures up.
The condo segment of the housing market could really benefit from the pressures to go smaller. Not only are condos usually smaller than detached homes, but there can be benefits to heating and cooling when the condo is part of a larger building. Another bonus is that the cost to buy is usually less than a similar sized detached home.
If the predicted move to smaller homes is true, it comes at a good time. Smaller homes, most notably condos, right now are not weathering the downturn as well as single-family homes. This could actually make condos your best long-term investment, despite the flood of investors who are leaving the condo market.
Michael