The tiny home craze has drawn a lot of attention over the last few years, but is it overhyped? Are more homeowners really ready to ditch their spacious digs for living spaces that are 500 square feet or less?
Apparently not. Even the priciest places—where homeowners are the most likely to downsize and save on costs—are not favoring tiny homes. Tiny homes comprised only 2 percent of all home sales in New York City and San Francisco over the last eight years, according to a new study from PropertyShark, a real estate data website. Homes under 1,000 square feet made up less than a quarter of all sales in both cities, too.
In fact, tiny homes are more prevalent in less dense areas—like Columbus and Indianapolis—than in places more starved for housing space, like Chicago and Philadelphia. However, researchers are quick to note that the differences are still a small fraction of home sales in any of the cities.
Overall, tiny homes “don’t appear to be an attractive option for the average buyer at this point,” PropertyShark notes in its study. PropertyShark analyzed home sales volume, median sales prices, and apartment completions in the top 10 U.S. cities by population and calculated the market share of tiny homes in each city between 2010 and 2018.
Tiny rentals, on the other hand, may be more popular. Micro apartments and tiny homes are most popular with short-term renters, such as students and young professionals, the study found. In San Francisco, nearly one-quarter of completed apartments were smaller than 500 square feet.
But for homeowners, they still prefer more space to spread out.
“A prevailing theory is that tiny homes can aid in the housing crisis for low-income households,” PropertyShark notes in its study. “However, most low-income households are families with children, and the smaller spaces aren’t very practical. … While the concept is trendy, it’s hard to know if it will really take off in the near future. For now, most developers are taking a ‘wait and see’ approach until the direction is clearer. … It’s unlikely that tiny homes will become a major trend anytime soon.”
Source: “Do Tiny Homes Live Up to the Hype?” PropertyShark (Feb. 11, 2019)
