In the year 2008, the United States, and eventually the rest of the world was feeling the effects of the global financial crisis. The housing industry was reeling from the bubble bursting just a few months prior and home values were dropping at a larger rate than any of us had ever seen before. Home sales were down and inventories were rising rapidly. All of this was really not surprising given the financial climate. However, things get interesting when you take a look at the average square footage of homes sold during that period, broken down by type of financing.
At a time when you think everyone would be cutting back, there were only two groups who cut back on the size of the home purchased during the financial crisis. Those who purchased using a conventional mortgage, cut back slightly – from a high of 2,644 square feet in 2008 to a low of 2,543 in 2010. This represents a decrease of 3.8%. The cash buyers are the group that really took notice of and reacted to the financial conditions surrounding them. The average home square footage for this group dropped a whopping 14% – from 2,617 to 2,250.
Data Source: United States Census Bureau.
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