Americans Seen Living Large in 'Micro Homes'

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Libby Crawley knew she wanted to downsize from her 2,700-square-foot house but she never thought she'd end up with something as small as she did -- 700 square feet.

"When I first drove over and looked at it, I thought it was way too small," she says. "There was no way I could fit into this house."

To her surprise she did fit. The space is efficiently organized, adequate and functional. And the tiny home held another surprise.

"Heating and air," she says. "Actually, my utility costs are probably less than $100, year 'round."

At the height of the real estate boom, about nine of Crawley's houses could have fit in the big homes -- the "McMansions" -- that were the hottest on the market. Those homes were priced in the millions and ran to 7,000 or 8,000 square feet. Now, they are languishing on the market, and homes half that size are in demand. But the next trend may be in even smaller homes.

Only a tiny fraction of the new houses being built are micro homes. But with median new home prices still $230,000, builders like Tim Russell of V2 World in Phoenix think they are at the beginning of a trend in affordable housing.

"Although we have historically been lower than the median price of homes in America," Russell says of the Phoenix market, "over the last four years our prices have increased two- and three-fold."

Russell delivers a 720-square-foot, energy-efficient home, complete with furniture and appliances, for $125,000 to $150,000.

And it's not just in Phoenix: Micro homes are being built all over the country. They range from as few as 450 square feet to 2,200 square feet. They are being built on land that was once too small to accommodate a home, land that is often close to a city center.

Builders are convinced there are enough Americans like Crawley to make tiny houses the next hot homes. They say their inquiries come primarily from first-time home buyers facing those high median-home costs, rising interest rates and higher utility prices -- and some, like Crawley, who are downsizing their living accommodations.

"Currently, only nine percent of individuals living in San Diego can afford a median-priced home," Russell says. "In San Francisco, something like two percent of nurses, five percent of cops and four percent of teachers can afford a median-priced home. So from what we're looking at, there are not enough affordable homes in America."

Designer Joe Herzog says the secret of success for small homes is to make them "live" large.

"It's about efficiently using space," Herzog says. "And it comes down to not only room spaces, but drawer sizes."

Herzog points out that kitchen appliances, like a refrigerator, can be smaller and placed below a counter. A bedroom can gain the appearance of space with bigger windows and more light.

"It's a question of using critical thinking in the design process" he says.

Besides, he adds, "How big does a shower have to be?"

After more than a year in her new home, would Crawley recommend it?

"I think that a person would have to be somebody that likes to live simply," she says. "For me, it hasn't been a sacrifice in as far as the quality of my life."

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