Newspaper article THE JOURNAL RECORD

Comfort and Prestige Add to Higher Prices of Homes

Newspaper article THE JOURNAL RECORD

Comfort and Prestige Add to Higher Prices of Homes

Article excerpt

NEW YORK - Inflation isn't the only reason for the big price tags on new houses in recent years. Comfort and prestige on a luxurious scale probably count as much, judging from a Census Bureau report.

Data from the report show that much of the new-home construction market has gone upscale to a surprising extent at the very time, oddly, that pressure is growing for more affordable housing for young families.

The situation poses a dilemma for housing markets: How can existing owners continue to move up to more expensive housing if first-time buyers cannot afford to buy the houses the more affluent owners are leaving?

Most of the demand for luxurious accommodations comes from existing owners who, benefiting from rising market values in the past few years, have amassed mountains of equity that can be applied to fulfilling their housing dreams.

Eventually, some housing people predict, the trend to more expensive housing could automatically abort because of weakness in the lower end of the market, leaving a dearth of the move-up buyers with sufficient equity.

The Census Bureau report shows that in 1988 the median size of new homes was 1,815 square feet, compared with 1,605 square feet in 1984.

More revealing are the amenities: 42 percent with more than two baths, compared with just 28 percent in 1984; 26 percent with four bedrooms or more versus 18 percent in 1984; and 75 percent with central air, versus 71 percent.

The proportion with more than one fireplace also rose, to 65 percent from 59 percent, as did the proportion with garages able to accommodate more than two cars, 65 percent against 55 percent.

A separate survey of homeowner preferences by the National Association of Home Builders confirms that consumers seeking another home look for more room and more amenities, and that they won't accept stripped-down houses. …

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