Some houses are so small all you need is a little installment loan to get one

Newly built homes are shrinking. Home builders facing the competition of better-priced foreclosure and distressed properties are reversing their decades-old philosophy that bigger is better. They’re now offering smaller, more basic homes designed specifically for first-time buyers.

Features that were important to buyers during the boom of the 1980s — massive square footage; granite countertops; separate living rooms, family rooms, and home theaters; a bathroom for every bedroom plus a spare — don’t seem to matter right now. Today, home buyers will deign to have the children do their homework in the kitchen rather than the library — if that’s what it takes to save a little extra cash and get a low interest loan.

Weight Watchers for houses?

A drive around many American neighborhoods confirms it: Houses have become morbidly obese. According to the National Association of Home Builders, the average American home swelled from 983 square feet in 1950 to 2,349 square feet in 2004 — a 140% increase in size. And it’s not just the footprints of these Garage Mahals that are huge; everything about them is huge:

Which came first, the Hummer house or the house?

three- and four-car garages, professional-grade kitchen appliances, and soaring cathedral ceilings.

Is the Hummer house really obsolete?

To be precise, according to the U.S. Census Bureau, the median square footage of newly built homes fell by 7%, down to 2,065 square feet, in the first three months of 2009 compared with the same period in 2008. But does a 7% decrease in square footage really mean that the romance between Americans and their monster homes has finally cooled? Sarah Susanka, author of The Not So Big House thinks so:

A new ethic is arising right now that will become commonplace — as commonplace as is recycling today, when just a few decades ago it was rarely, if ever, done. As more and more people build or remodel homes that satisfy in quality rather than quantity, there will be a huge shift in what we perceive as desirable.

Susanka believes the current shrinking trend echoes the one of a century ago, when simple bungalows supplanted elaborate Victorians.

Will bigger still be better when everything gets better?

The belief that bigger is better is deeply instilled in American culture, and the shrinking footprint of homes geared to first-time buyers could be nothing more than a bow to the current recession. In a recent CNN interview, Kermit Baker, chief economist for the American Institute of Architects, agreed: “Home size gains flatten out or decline during recessions, and we’re in the midst of the most serious housing recession in decades.”

A symbiosis of shrinkage agents

Smart-growth plans

Cities in some parts of the country have instituted growth plans that encourage development in core areas, leaving large patches of green, undeveloped territory farther out. These plans effectively limit development to areas that are already densely populated, drive up the cost of building, and discourage McMansion development.

Building restrictions and moratoriums

Reeling from the sight of towering starter castles cropping up in neighborhoods across the nation, many governments have imposed stricter building limits and have even temporarily halted new construction while they try to get a handle on newcomer settlements of 4,000- to 10,000-square-foot homes.

Affordability

The bottom line drives everything, and people will buy as much house as they can afford. With the economy in turmoil, however, home buyers simply cannot spend as much money today as they could just a few years ago.

Energy costs

The rising price of oil has driven up many of the costs of home ownership. Bigger houses cost most to heat and cool, and have more lights and appliances to run. Rising energy prices have also increased the costs of building materials, making bigger homes that much more expensive to construct.

Demographics

The aging of our population may be playing a part in the smaller-home trend. Whether it’s enough of a factor to make a difference is open to debate, but many aging baby boomers have become empty-nesters and are now downsizing.

Tight credit for big mortgages

Without question, and perhaps thankfully so, the jumbo loans needed to finance big-hair houses have become much more expensive and difficult to find.

BBC News reports that Azharuddin Ismail and Rubina Ali, two child actors from the Oscar-winning film “Slumdog Millionaire,” will be moved from the proverbial outhouse to the penthouse by Indian authorities.

That’s right, little Jamal and Latika are moving up in the world.

Azharuddin and Rubina were discovered by casting agents in Mumbai’s Garib Nagar slum, according to reports. After the film became a runaway hit, folks were beginning to grumble about such famous children having to live in the squalor of Garib Nagar. Of course, no child should have to live in squalor. Hopefully the day will come when you don’t have to be famous to get attention, but I’m happy for the children nevertheless.

Now, how about non-movie star Indian kids?

Local housing association chairman Amarjeet Singh Manhas has gone on record as saying that “Since the children have made the nation proud, they must be given free houses. The chief minister of the state has approved this.” Great. But millions more continue to live in what amount to cardboard boxes and outhouses. According to the BBC, the money for the children’s new homes will come from “a small allocation which local politicians are allowed to distribute as they see fit.”

Little Latika, who is currently nine years old, lives with her family in a one-room dwelling. Ten-year-old Little Jamal’s family lives under a tarp next to a crowded Indian thoroughfare. It was recently taken down.

And what kind of wages did the children earn?

Little Jamal’s dad Mohammed told The Times of India that the family received little money from Danny Boyle and his film crew. What little they received has come and gone. Latika’s father Rafiq Quereshi spoke of a similar fate. “We are happy that we will have a permanent roof over our head,’ he said.’

“Slumdog” director Boyle denies there was any exploitation, and insists that the children were paid “above local wages for 30 days of work.” To their credit, they did offer the families brick and mortar homes before the Indian government stepped in.

Doing what’s right

On a positive note, the kids now have money for formal education. They’re enrolled in school for the first time. Yet voices criticizing the government will not be silenced. Indian media reports many feel the government’s action amounted to a political move to gain favor before the upcoming general election. In order to prove otherwise, I think India should work harder to provide homes for its people and spend less time and money fighting a “war” against Pakistan.

Times are tight and payday loans can help when you’re in a small-time financial jam. Once you get to the point where your finances are in order and your credit rating has been built up high enough to apply for a mortgage loan, it seems like the sky’s the limit.

There are few things more exciting than becoming a homeowner for the first time. The pride, the sense of accomplishment… the toxic drywall.

Dave Burdick of the Huffington Post reports that new homeowners in Florida have noticed very strange smells in their new homes. After inspecting, officials believe that the smell is coming from high sulfur content in drywall that came from China. Now cases have been reported in other states.

What every homeowner should know

According to Burdick, blogs like Treehugger first began to break this troubling story. Now many others know. What follows are highlights from a sample press release that provides some answers about what’s going on here:

• Chinese drywall  first entered the U.S. in 2001, through the ports of Long Beach or Oakland, California and Seattle/Tacoma, Washington
• In most cases, air conditioning coil or HVAC failure will accompany the presence of this drywall. Corroded wiring is also common in homes built or remodeled since 2001
• Physical symptoms may include mild to severe upper respiratory problems, nose bleeds, headaches or other serious medical conditions
• This drywall is most typically found in single-family homes in Florida, California, Texas, Nevada, Georgia, the Carolinas, Ohio, Washington, Oregon, Colorado, but can be found in any state with homes, condos or commercial property built or remodeled since 2001
• It is feared – according to the Homeowners Consumer Center -  that suspect Chinese drywall was used in reconstruction of homes in the metropolitan area of New Orleans post-Hurricane Katrina. People there need more than a loan until payday…

Be a good trade partner, China!

This frightening news comes at the wrong time for America. People are suffering under an oppressive economy, and many cannot afford the remodeling that will be necessary. Payday loans help with small budget surprises, but were not intended to fund full-scale home remodeling, complete with untainted sheet rock. Chalk another one up to cheap manufacturing and a lack of safety controls. China, you’re on my short list…