The Real Estate Heretic
Yesterday I sat down with Walter Pierce, a 90-something year-old architect who designed the “Peacock Farm” house and developed one of the first modernist/progressive neighborhoods in the Boston area. I hope to run the interview in this space and at my modernmass.com blog next week.
But chief among the subjects on which I wanted to hear Mr. Pierce’s comments is the idea of economy of scale of residential homes. The prize-winning “Peacock Farm” house that Mr. Pierce designed in the 1950s was a three-bedroom split/multi-level with a mostly open floor plan in the main living area, three bedrooms up a level, and flexible space on a lower level, often with a family room, and a bedroom and/or office space. Since the main support framing was designed as post and beam, there were few if any interior load-bearing walls and spaces were often reconfigured to suit the individual lifestyles of the homeowners. Many original owners stayed in them until they retired decades later. The use of space is almost perfect for most, but was easily expanded upon.
Clearly, everyone has different needs when it comes to a home, from single people renting studios or one-bedroom apartments, to families of six or more needing more living and yard space, as well location preferences or needs — city, suburban, “exurban,” country. But how big is too big? I read a quote in the Times this week from the CEO of Toll Brothers, one of the major residential builders in the nation. He was predicting a rebound of the national housing market (I know, big surprise, eh?) when he offered this simple statement about renting versus owning: “Most people still want the big house with the big lot in the desirable school district in the suburbs. No one ever renovated the kitchen or redid a room for the kids in a rental,” Mr. Yearley said. “I think — I hope — we’ll be O.K.”
This is a little bit out of context, of course, but he makes it sound as if there is no middle ground. It’s as if the only choices are renting a small place in or near the city with a dated kitchen or to own a “big” (that means “giant” to me) house with a huge lot out in the suburbs. I am certain that if Mr. Yearley and I sat down and discussed this there would be more nuance, but this is the image that such national home builders as Toll Brothers have in my mind — big boxy colonial-pastiche houses with Palladian windows on two-acre lots out on old farmland in the distant suburbs. Give the people what they want?
But it’s true. To some extent. As I noted in an earlier post, my business partner and I had a large new colonial with the Palladian window. It is in a town, Dover, with one of the top school districts in the Commonwealth. But it seems people who buy in Dover want big estate-like properties, or less expensive “starter” homes. This modest house fell somewhere in the middle, which is in less demand in Dover. Many people who came to see it, small families thought it was “too small.” It has five bedrooms, four full baths, 4000+ square feet. When a couple who came in from Hopkinton told me it was too small for them, and that they currently lived in a 6000 s.f. house, I actually felt kind of disgusted. We could not sell the house and have tired of the Dover market. (No offense, Dover. You’re beautiful!) The builder and we decided we should go our separate ways on this one and hope to regroup with him on another project someday soon and in a more dynamic market.
Like Lexington and Arlington. At least this spring. If this house was for sale in Lexington for $1.2 million, it would have likely sold in a reasonable amount of time. Yes, real estate is down if one looks at it as a monolithic Real Estate Market. But if you have a $500,000 – $900,000 house in Lexington or Arlington, priced well and in a good location, chances are if it were on the market now you would be receiving multiple bids. We alone have had five listings in these two towns in the past month that had multiple bids and/or sold the first week. These are two very different towns, but both are considered great locations.
For many buyers caught in recent bidding wars in these towns, “rationality” may not seem like an accurate term to describe the return of the bidding wars of yore. But there are reasons they are bidding against other buyers on the same properties. Inventory is fairly tight. Buyers still want great locations in towns relatively close to Boston, with good or great school systems. Buyers are willing to pay the same price they would pay in towns further out to get less house, but in a better spot. Gas prices are up, commuter times aren’t getting any shorter, and jumbo-sized mortgages are likely relics of the past. Four-person families realize that maybe they don’t need five full bathrooms and two extra bedrooms. Many buyers are educated enough to want the same thing primarily: location, location, location. This is how real estate markets (note the plural) work. Sure, I would love some extra space above my 1800 s.f. three-bedroom house, but as soon as I venture into the hinterlands beyond Route 128, I start to worry about bear attacks (you think I’m joking?).
Smaller homes on modest lots can still be absolutely luxurious. More people agree with this notion than in the past. In recent years, with book and lifestyle franchises like Sarah Susanka’s Not So Big House gaining popularity, fewer people equate space with quality.
A lot of this is heresy for a real estate agent like me. I had some clients a few years back looking at various options to upgrade from a tiny two-bedroom ranch. They asked me what I thought of a particular development that was offering new vinyl-clad “colonials” on clear-cut cul-de-sacs in a nearby town, listed for enticingly reasonable prices (especially on a per-square-foot basis).
“Well, if you’re asking my opinion,” I started, “they are big, boxy, not very well-built houses. You get what you pay for.”
“Ah, I see. Well we went to visit one at an open house,” the wife explained, “and we really liked it.”
Adjusting quickly into sales mode, I replied, “Oh, yes, well, if you like them, they are quite spacious and have some great features, like master suites and so on.” But holding onto my integrity, I reiterated, “But there are reasons that these are priced so low relative to other houses in the area.”
They ended up buying and being promised certain things post-inspection and post-closing by the developer, who has moved on to the next project. But a master suite and all those bedrooms in a shiny new house sure is tempting after leaving a two-bedroom ranch built 60 years ago. I started to picture myself there. Briefly.
This week, though, we are bringing on a truly charming (yes, real estate for “not so big”) four bedroom Bungalow-style house in a great spot on a dead end in Arlington, bordering acres of conservation land while being very close to the bike path, the MBTA bus, shopping, restaurants, etc. The owners installed a geothermal heating and cooling system and the house was re-insulated so that it is an energy efficient and comfortable home in addition to being drop-dead cute. It will be offered in the high $400,000s and I am optimistic it well sell fast, if not for over asking price. (It will be on modernmass.com later this week.)
A previous family owned the house for 48 years and raised eight children in this house. There is one full bath. OK, those days might be gone for most of us who shared rooms with siblings and eight kids for one bath. But there are buyers out there with only one or two (or no) kids, who are also not looking for the giant house with many acres of lawn to bribe the kids to mow.
Not that there’s anything wrong with that.