Fueled by an ever increasing contingent of recession scarred millennials, creative home builders recognizing the American trend toward downsizing, and cutting edge residential zoning in urban corridors, there is an unusual yet growing social movement afoot entitled the tiny house movement. Movement members are choosing a lifestyle that emphasizes a tiny home environment. Micro-housing is just another name for tiny home living. To paint a better picture for those unfamiliar with tiny home living, consider the size of a typical American, three bedroom, two bath, home approximating some 2200 square feet of living space. Now consider a tiny home of size from a low of 200 to 400 square feet of living space to a high of just under 1,000 square feet of living space. Some even include RV living, houses on wheels, as micro-housing, others do not. These houses come in all shapes and sizes and can vary considerably in material construction. What they do all share in common is the offer and allure of a smaller, more efficient living space.
Living tiny used to be limited to apartment and condominium living and the occasional “mother in law”, separate or attached living space with its own kitchenette and bathroom, existing alongside a single-family dwelling. Not anymore. Not only is this a growing movement, there are numerous websites and social media platforms focusing on living the tiny life. Certainly, this movement is not for everyone. Many millennials seek more luxury accommodations and a larger amount of living space for their first home purchase, so do many others, all at a price of burdening themselves with mounds of debt others are determined to avoid. That cycle of debt, if not overwhelming to most, should be cautionary for all.
Consider the raw general numbers associated with a typical home purchase at almost $300,000.00. Whether or not the mortgage is a long term, thirty year, fixed rate or not, by the time you factor in a down payment, all the principal and interest payments, taxes and insurance, and then add in all the other costs attendant to home ownership, the cost often exceeds one million dollars or more. Now compare that to a tiny home purchase, often for cash, at about $80,000.00.
Tiny homes are often for those, many under thirty-five, who plan their lives around minimizing financial risk, allowing themselves to better survive an inconsistent job market while they pay off burdensome student debt. Tiny homes are also the choice of a select number of baby boomers watching their retirement savings taking one hit after another while shouldering the burden of helping other family members from children and grandchildren to aged parents.
Some of the tiny home statistics are amazing. The per capita income average for tiny home ownership approximates $42,000.00 annually, more women than men are tiny home owners, and these tiny home owners of both sexes have less debt and more disposable income, by far, than their comparable brethren who are more traditional homeowners. While less than 30% of US homeowners can say they have no home mortgage to contend with every month, almost 70% of tiny home owners can. Most have graduate degrees and most surprisingly, some 40% of micro-home owners are fifty years or older.
As can be readily seen by the various communication platforms that tout this growing trend, tiny living encompasses sound fiscal planning and a life simplified, offering an environmentally conscious footprint.
It is a new world today with home ownership. For many, it is not the home size but space utilization that matters. Bigger, standing alone, is not always better and function dwarfs size in much current home thinking. There is a newly appreciated focus on home access and design rather than square footage. Urban corridor growth and planning often takes into account how best to provide easy urban access as well.
Among the most pressing obstacles to consider with tiny home ownership are two of the most practical. Availability is an issue in most communities and there may well be a very limited market for resale. So the best approach to take is a most cautious one for home owners and investors alike. For investors, lease options and sandwich lease options may be a worthy consideration in a given local market, particularly in an emerging job market with cutting edge, carefully planned urban corridor development already in place.
Tiny homes and other micro-dwellings are here to stay and need to be recognized as a new wrinkle in the real estate landscape.