Real Estate
Upscale amenities, million-dollar homes and lust for luxury
By David S. Jones, Real Estate Center at Texas A&M University
Apr 10, 2011

Asked to choose between a bigger house with fewer amenities and a smaller house with high-quality products, new home buyers leave no doubt what they want. Sixty-three percent prefer the good stuff.

To pay for those quality features, 57 percent told a National Association of Home Builders survey that they prefer the items be included in the base price of the home. The other 43 percent want the items offered as options.

What are these high-end features buyers want in their new homes? In the kitchen, 84 percent want a walk-in pantry. Other preferred quality features include an island work area (77 percent), special-use storage (62 percent) and built-in microwave (62 percent).

Thirty-seven percent of households want their kitchens separated from the family room with only a half wall, but 34 percent want no separation at all.

In new home bathrooms, the preferred amenities include a linen closet (91 percent), exhaust fan (88 percent) and separate shower enclosure (78 percent).

Nine-foot ceilings are now a preferred standard. Consumers like the openness and light the higher ceilings make possible. Younger households prefer the washer and dryer be located near the bedroom; older households want them near the kitchen.

Asked to choose between more space in the master bedroom or master bath, 69 percent opted for more bedroom space. After growing steadily since 1970, it appears the size of the average new home has leveled off at 2,340 square feet. This is close to the size homeowners say they want — 2,426.

All these added amenities have combined with appreciation to send median home values upward. Today, the percentage of homes valued at $1 million or more is higher than ever.

According to the latest American Community Survey from the Census Bureau, the national median home price in 2003 was around $140,000, up nearly 16 percent in the last three years. The percentage of million-dollar homes nearly doubled during that same time from 0.5 percent to 1 percent.

Not surprisingly, California has the nation’s highest median home price at $316,000 and the highest percentage of million-dollar homes — 4.1 percent.  Texas has one of the lowest (34^th) median prices at $94,515. Of total Texas homes, .36 percent are valued at $1 million or more.

According to Inman News, California is a breed apart when it comes to the lust for luxury. An architect there said 15,000- to 24,000-square-foot homes are the “norm” for his firm. And there have even been some 70,000-square-foot palaces that cost as much as $70 million. Coldwell Banker’s sales volume of $1 million-plus homes hit $35.5 billion last year, up from $23.3 billion the previous year.

Obviously, the old saying about “keeping up with the Joneses” needs to be revised. We should say Americans are trying to keep with the Bill Gateses.