Buying a smaller house can sometimes be the right move

December 04, 2008|By Ellen James Martin

It wasn't that long ago when ownership of a large SUV was a status symbol - at least in some quarters. Then, too, there was lots of prestige attached to the "mega house," with such glorified features as the professional kitchen and multiple gas fireplaces.

But in a recessionary period like this - when frugality is considered more of a virtue than extravagance - it's a lot harder to impress your friends with any sort of SUV, even a Lexus. Likewise, it's tough to wow people with a palatial property that carries whopping mortgage payments.

Of course, many home buyers with growing children still yearn for a spacious house with lots of extra elbow room. But in hard economic times they're more interested in opting for a place with payments comfortably within their reach, says Kay West, former president of the Council of Residential Specialists (

Budget-conscious buyers are also extremely cognizant of the energy costs associated with the ownership of a large home, she says, and many purchasers under 40 are especially focused on the environmental impact of owning a big place.


Beyond money, there is the pressing issue of time. With job fears so prevalent, people are working longer hours in hopes of keeping the positions they have. This is in addition to the time pressures facing two-income families raising children.

"A big house with a big yard means a lot of home maintenance responsibilities. What families tell me now is that they don't want more space than they can actually use," West says.

Here are pointers for those seeking to make the most of a small home purchase:

  • Choose your small place in an area that gives you a better lifestyle.

    "You don't need a big, splashy home to get improved quality of life," says Eric Tyson, a personal finance expert and co-author of "Home Buying for Dummies."

    Given the moderation in home values, it may now be possible for you and your family to break into a prime neighborhood once out of your reach.

    "Look for a small house in a community with excellent schools, great recreational amenities or a shorter commute to work," Tyson says.

    Though he doesn't see any quick fix for housing markets, Tyson believes those who act now to gain a foothold in a desirable area will see their properties rise in value within about two to three years.

    As is always the case, he says buying a small house in a top-rated community is a wiser strategy than purchasing a larger place in a second-tier neighborhood.

  • Recognize the benefits of a smaller yard.

    People heading into retirement often yearn for freedom from the laborious chores of upkeep on a large yard. Unless they're devoted gardeners - or have the funds to hire a professional landscaping company - they'd rather downsize to a place with limited greenery.

    But these days it isn't just older people who hanker for a small yard. Tyson says more young families are also shying away from large yards in hopes of claiming more free time with their children.

    Trade off rooms with minimal value for your family.

    Although large houses are still popular among those who can afford them, West says many money-conscious buyers in all age groups are telling lenders: "Don't max us out on our mortgage."

    One way, she says, to get a home that works for your family while containing your monthly mortgage payments is to trade off rooms that you won't often use, such as a formal dining room or formal living room.

    "If you're trying to live within your means, it makes sense to obtain a house that's aligned with your lifestyle needs," West says.

    Don't fret if you can't afford one bedroom for every child.

    Many in the baby boom generation grew up in relatively small houses and shared bedrooms with siblings. It wasn't unusual for two girls to share, or for two boys to do so, West recalls.

    Though one bedroom per child is now considered the standard, West says parents shouldn't feel they're depriving their kids of a normal upbringing if the family's finances don't allow one bedroom per youngster.

  • Consider a "vintage house" in a choice neighborhood.

    Until recently, many families with young children were inclined to head to outer suburbs to obtain the largest house they could afford in a new subdivision. But increasing traffic congestion has caused more families to rethink the idea of "driving to qualify," as real estate agents call it.

    Instead, West says more families are now looking at "vintage homes" built before the 1970s and often set in areas with easy access to employment centers and cultural amenities.

    "For the same money, you can often buy into a better location in an established suburb or a semi-urban town. You might also find better schools for your children there," she says.

    One downside of living in an older neighborhood is that homes there typically have fewer bathrooms and less storage space than contemporary buyers have come to expect, West says, adding that you could find a vintage home that's been upgraded with the addition of a master suite that includes a spacious bathroom and a large, walk-in closet.

    "An extra bathroom and more storage space - coupled with an enlarged family room - can make a relatively small, older home a lot more livable," she says.

    To contact Ellen James Martin, e-mail her at

    Copyright 2008 Ellen James Martin

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