There’s no doubt that residential construction is big business, with a projection of nearly $412 billion to be spent in 2016 alone. But following the 2008 economic and housing crash, there has been a renewed interest in minimalism, and the housing sector has not been spared that change. Following the crash of the housing bubble, though the average size of new American homes has gone up somewhat, the average number of large homes over 3,000 square feet dropped from 45% of new home construction in 2007 to 31% in 2013. One trend that has been gaining steam is the tiny house trend. But how does that trend affect the building materials industry? Let’s take a look:
What are tiny houses?
A tiny house is just what it’s billed as – a home that is typically under 400 to 500 square feet. By making innovative use of space-saving storage, sleeping lofts, multi-purpose areas and a wide range of customized features, a tiny house can be mobile or permanent. Though typically used by singles, couples and empty nesters, there are many small families building and living in tiny houses throughout the United States. Why? With the increasing interest in sustainability and the economic downturn, many people wanted to follow a simpler way of life that didn’t include a large mortgage payment every month, with the average tiny house costing $23,000, significantly lower than most new cars on the market, and 68% of tiny house owners not holding a mortgage. Tiny houses are a great option for the minimalist trends that have been growing in popularity and are significantly more energy efficient than their full-size counterparts.
Growth of the tiny house market
The tiny house market isn’t very large at current, recently representing about 1% of US home sales reported. It’s important to note that tiny homes that are owner-built in areas with minimal codes, built with cash rather than a loan or built as mobile units may not be included in the reported sales. This makes it difficult to provide specific figures on the level of growth, but industry feedback provides plenty of anecdotal evidence of significant expansion. These sustainably-built homes appeal to most demographics, provide great options for customization and have ideals that strongly resonate with intentional living crowds. Whether the tiny house market continues to grow may be secondary to the direction it’s taking, one reflected in greater energy efficiency and sustainability in everyday homes across the country.
The impact on building material companies
But what’s the impact on building material companies? Tiny homes can range from the owner-built home using found materials and sketched plans to builder-constructed, completely customized luxury homes. There are great opportunities to market directly to the consumer who would typically use a big-box store for purchases, as well as excellent opportunities for marketing sustainable housing products. For the less qualified DIYer, tiny house kits that either provide a dried-in shell or a complete home can be developed, with different levels of trim and customization options available. Beyond tiny homes, the trends that are developing for sustainable and environmentally-friendly housing products are reaching into every home in America through smart thermostats, low-VOC paints and stains, recycled materials and space-saving improvements.
To market, sell and distribute to this growing sector of homeowners, it’s important to understand that there is no single demographic purchasing tiny homes. Flexibility in packages, willingness to help DIYers with design and codes and extreme customization for luxury tiny homes are all vital areas to consider for your approach to this not-so-tiny market.