Smaller, cheaper, more flexible — and 5 other ways new homes are changing with the economy

Newly built houses are energy-efficient and stripped of extras but still have plenty of multifunctional living and storage space.

What hasn't killed new homes is making many of them better.

Money troubles, difficulty getting financing and competition from overabundant, cheap existing homes keeps forcing many smaller companies out of business. But the pressure to make distinctive, cost-competitive products is inspiring builders to make fundamental changes, many of them improvements.

Homebuilders had forgotten what a huge competitive threat the existing-home market was. When the housing bubble burst, they were being outsold 24 to one, and they had to seize on what distinguished new homes from old.
New homes, reshaped by today's economy, are:

1. Energy efficient
For the same reasons buyers like fuel-efficient vehicles, they're drawn to highly energy-efficient homes. The lower operating costs are reassuring to people who are putting every penny into a purchase and must contain their ongoing expenses.

A new energy-efficient, weather-tight structure is one of the strongest arguments for new construction, Thompson says. With rising fuel costs, buyers see efficiency as a must. Many larger builders — Beazer Homes and Lennar Corp., in particular — are stressing the energy efficiency of their homes.


Smaller builders like Alex Pettitt of Spring Builders, in Austin, Texas, led the way. Pettitt has built homes for years using strategic design, efficient windows, super insulation and sophisticated heating and air-conditioning systems. Demand is taking off, he says, in part because the geek factor is gone. "Green," efficient homes have become indistinguishable from other homes and "have none of the perceived sacrifices," Pettitt says. Solar panels are nice but not necessary on an extremely efficient home, he adds.