Downsized America: Homebuyers Look for Less

June 29, 2009— -- For some home buyers, bigger is not always better.

After he was laid off from his job as a graphic designer, Doug Keyes said it was a practical decision to trade in his family's five-bedroom home in Seattle for a much smaller pad.

"Financially, it's more secure that way," the 45-year-old artist said. "We weren't any happier in a big home, so why not go back to a smaller home?"

Keyes, who sold his house about a month ago, is currently looking at homes that are about half the size of his old house. He's even looked into two-bedroom, one-bathroom homes for his wife, two kids and dogs.

But finances aside, the decision to move is also economical, Keyes said.

"It was a great house and a great part of town, but we found out that we weren't using all the space," Keyes said of his old home. "We were accumulating too much stuff."

Keyes is one of many home hunters looking to downsize to a more modest home. Though he's been house hunting for a year, Keyes said he's optimistic about the search.

"As we've been looking, we watch prices go down and so better homes keep falling into our price range," he said.

Glenn Kelman, CEO of online real estate company Redfin, said that his agents have been seeing homebuyers "all over the place" seeking smaller homes.

"I think there was rationality a couple of years ago that the more house you bought the bigger the opportunity you had to sell it at some sort of huge profit," he said. "Now it seems like everyone wants to live within their means. Partly it might be an environmental shift; mostly I think it's due to the recession. We see it in almost every city we do business."