It’s no surprise that today’s homes in many ways are better than ever. Smart engineering and new technologies have improved most of the products we own, from automobiles to televisions to household tools and appliances. Homes are now more thoughtfully designed, make effective use of technology, and consume far less energy than homes built decades ago.
Homes don’t have to be bigger to be better, but the national trend is toward larger and larger homes. The trend seems at cross-purposes with the growing sense of crisis about housing affordability and shrinking household sizes.
Even without taking into account the growing size of new homes, industry data for the Portland metro area shows that housing cost increases far exceed inflation. A private firm, MetroStudy, has analyzed newly constructed homes in subdivisions of four or more homes in the Portland metro area since 2003. In 2003, the median cost to build those homes was $106 per square foot. Costs escalated rapidly until 2006 and dropped for six years, then started to climb again. In 2016, a new home in the metro area costs $172 per square foot. Adjusted for inflation, the $106 per square foot cost in 2003 would be $137 today.
Those square-foot costs include the price of land, labor and materials, infrastructure improvements, taxes and government fees. The greater costs also reflect improved standards for seismic safety and weatherization.
The MetroStudy research also showed a peak in median home size in the Portland metro area of 2,487 square feet in 2008, followed by a four-year drop and a slow climb back to 2,219 square feet in 2016. Clark County data shows an average size of new homes in the county in 2004 of approximately 2,500 square feet.