by Lots of people have been asking me what the big news was at the recent High Point Market.
From what I saw, one of the big stories was the growing opportunity for furniture designed for smaller spaces. While I am the first to admit that Americans love their Bubba chairs, big homes and generously scaled furniture, I think since the pandemic, we are beginning to live in a less-is-more world.
You’ve probably all heard the term “shrinkflation” and, if not, I bet you’ve noticed it when shopping for groceries. Since Covid-19 shook our world, suppliers have been trying to shake a few extra dollars from us but either charging more for the same size of something or holding the line on pricing but giving us a smaller quantity then before the pandemic.
Well, shrinkflation has hit the housing market and if you don’t believe me, ask anyone trying to buy a new or even an existing home. Talk about getting more for less!
Actually, let’s talk about how that is setting the stage for smaller-scaled furniture. According to the National Association of Realtors, the median sales prices of an existing home skyrocketed to $426,900 this past June, while the price for a new home in that same month ballooned to $417,300, the U.S. Census Bureau reported.
As prices for homes, both new and existing, continue to rise, home sizes for new builds are headed the other way. According to numbers from the National Association of Home Builders, the size of homes newly under construction in 2023 dropped to a median of 2,179 square feet, the smallest size in 13 years, according to that group.
The rapidly rising cost for land also resulted in the NAHB reporting that 17% of homebuilders said they built homes on smaller lots in 2023 to support home sales, and 14% said they built more townhouses as a result.
The one-two punch represented by rising home prices and mortgage rates has also opened the door for smaller homes that potentially are more affordable to first-time homebuyers.
While builders are scrambling to build new homes, the demand still far outweighs supply. Despite a pandemic construction boom, the U.S housing shortage grew to 4.5 million homes in 2022, up from 4.3 million the year before, according to a new analysis from Zillow. This deepening housing deficit is the root cause of the housing affordability crisis.
The issues of affordability and not enough inventory of homes for sale has also resulted in a growing number of consumers opting to rent while the wait to see if home prices may stabilize.
In fact, according to the most recent census information, renters account for approximately 34% of the U.S. population, with 44 million housing units in the U.S. currently being rented.
So, what we know is that there is a housing shortage, new homes are smaller, often losing a bedroom and or formal dining room, and more consumers are renting smaller spaces such as apartments, condos and townhomes.
At market, I did visit a number of showrooms with products designed specifically to provide solutions for smaller living spaces.
I will be surprised if we don’t see more companies looking to hit it big with smaller-scaled furniture.
I think the less-is-more mindset is here, friends.
