Builders cut home sizes and building costs in hopes of selling more homes and increasing their bottom line.

KB Home has announced plans to introduce smaller homes with simplified designs in an effort to attract first-time homebuyers and to increase their sagging bottom line. Gone are the McMansions of a few years ago, to be replaced by homes with smaller square footage and less wasted space.

KB will also be standardizing a lot of features, much as Lennar has already done in the Santa Clarita area. If you visit any of the Lennar homes in the West Hills, West Creek or RiverVillage developments in Valencia, you’ll notice similar cabinets, countertops and flooring in all price levels. The Lennar homes are virtually move-in ready, with designer paint on the walls and refrigerators included (earlier models included washer and dryer as well). KB has been known for the exact opposite… everything was NOT included, with items such as fireplaces and separate tub and shower in the master bath treated as extras, and no designer touches whatsoever without paying an extra fee to their design center.

Builders can save a lot of money by bulk-ordering a lot of the components used in building a home, such as windows, cabinets, countertops and more. This process can be even more effective by ordering only standard-sized windows, for example, so all homes use the same windows and no extra fees are paid for custom sizes.  Buyers will still be able to visit the KB design center to customize their new homes… the design center will still provide thousands of options for carpet, floor tile and more, and will remain a large profit center for the builder.

What the smaller homes will be lacking will primarily be the formal living spaces, to be replaced by “flex” space instead. With flex space, the main features of the house, such as kitchens, stairways and plumbing, remain the same, but certain areas can be either added or altered to be used as bedrooms, lofts or dens without adding significant cost to the home. As KB’s president and chief executive Jeffrey Mezger said, “You can’t sit and wait for the market to come back to you. You have to retool your product.”

I don’t know why builders continue to include the formal living spaces in many homes anyways… these are areas that most homeowners don’t use very often, and many would prefer to have usable square footage instead of rooms that just collect dust. Could it be that the change in the real estate market has also brought about a builder’s reality check in the way that people really use their homes? While some families do use formal dining rooms once or twice a year, the use of formal living rooms have gone the way of the dinosaur for the most part, at least in the Southern California area.

It’s funny that the home-buying public tends to be brainwashed into thinking that they must have a formal dining room that will accomodate their existing oversized dining room table, even though they haven’t used that table in the last 10 years. Quite an expensive room, and a waste of square footage in many cases, just to house a special table! It’s not uncommon to see single-guy homes where they’ve converted the formal living spaces into screening rooms and home gyms, or to see formal living or dining rooms converted into playrooms in homes with small children.

The upside to this standardization is that in many cases new home buyers will start out with nicer flooring, countertops and other features than they would if they were required to pay extra in the builder’s design center for these upgrades. The downside is that while the homes are generally nicer overall, they all look pretty much the same. Generic homes will be replacing McMansions, and hopefully consumers will begin to have more control over their discretionary spending as well.

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