And it’s getting smaller all the time. The new global economy has brought a world of building products and materials to our shores, expanding the possibilities of what our homes can be. (You’ll see a few of them in the special Products Showcase featured in this issue.) But now, ironically, the global economic web could very well cause our houses to grow smaller and our neighborhoods to loom larger.
No need to dwell on what’s happened to the price of fossil fuels; we’ve all felt the pain, and not just at the gasoline pump. The cost to heat and cool our houses and to power our electric and gas appliances is on the rise as well. Just this month, my electric provider raised its rates 18 percent. That kind of financial shock is happening all over the country. There are simply more of us worldwide competing for finite resources. And until new energy sources become more available, we can expect the demand side of the supply/demand equation to tip in favor of energy suppliers.
The high cost of energy is prompting home buyers to ask themselves not simply “How much house can I afford?” but also “How much house can I afford to heat?” and “Can I afford to commute to work from here?” With the specter of gasoline topping $4 a gallon, that big house on a cul-de-sac in a former cornfield 30 miles from town no longer seems like such a great choice.
Cheap fuel made huge houses far from employment centers possible, desirable, and affordable. But I believe we’re seeing the end of that era. Out of necessity, more people will begin to look for a place to live closer in, where there are more transportation alternatives and where communities are walkable. Building lots are small, scattered, and scarce in these areas, as well as expensive. That’s not a combination that favors big production builders. But it offers a great opportunity for custom builders, who have more nimble businesses and who understand how to build not-so-big houses that are rich with detail, craft, and amenities. I think demand for such houses will only become stronger, but don’t just take my word for it. Sixty percent of potential home buyers who responded to an NAHB survey earlier this year said that is the kind of house they would prefer to buy.
It’s a very tough housing market out there right now, with very few bright spots. But I believe that custom builders are uniquely positioned to take advantage of the bright spots that do exist. One of those is a demand for small, energy-efficient, carefully designed and constructed houses in dense, close-in neighborhoods. When you take stock of your own market area, be sure not to overlook this opportunity. It could make your business a bigger part of your small corner of the world.
