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Can Tiny Homes Help Combat Affordability Issues?

With home prices and demand continuing to soar and housing inventory running short in many markets, homebuyers might have to start reconsidering what they’re looking for from a home. One trend that’s been the subject of much coverage is the so-called “tiny homes” phenomenon—bite-sized domiciles that cater to those looking for cheaper options and a simpler approach to daily living. But can these tiny homes really serve as a viable option for homebuyers looking to find more affordable alternatives? Redfin’s new report breaking down the top 10 most popular tiny homes on the market might provide some clues.

To find the top 10 tiny homes on the market, Redfin looked at “actively listed single-family homes under 600 square feet in more than 80 markets” and used the number of “favorites” from Redfin users to gauge each home’s popularity among home shoppers. The most popular tiny home currently on the market, according to Redfin, is a quaint, 580 square-foot home in Seattle, Washington. Listed for $309,950, the home certainly isn’t cheap, but it is less than half of the Seattle median home price of $772,729 (according to Zillow data).

The top three tiny homes are all in Washington, actually. Number two on the list is a 400 square-foot residence in Monroe, Washington (median home price $424,885), and it’s listed for just shy of $300k. The third-most-popular entry is 440 square feet, listed for $229,000, and located in Gold Bar, Washington (median home price $291,744).

With the exception of number six (also in Washington state), the rest of Redfin’s top 10 list is located in California. It’s not surprising that some Californian home shoppers might consider going the tiny homes route—home prices in many California markets have traditionally been high, and the state as a whole is facing severe housing shortages. But how do these pint-sized California homes compare to their Washington counterparts in terms of affordability?

The top California tiny home on the list is in the midst of one of the hottest markets in the country, Los Angeles. At 470 square feet and $465,000, this L.A. home is almost $200k cheaper than the $674,140 median home price for L.A.

For those willing to sacrifice space to save money, tiny homes do look to be a viable option for homebuyers who can find one to their liking. Riverside, California, is apparently something of a tiny home mecca, with 153 of them currently listed, well ahead of Phoenix’s 99, New York’s 86, L.A.’s 70, and Tampa’s 55.

Of course, smallness doesn’t guarantee affordability. Redfin reports that the most expensive tiny home on the market is a 600-square-foot home in Santa Cruz, California, that’s going for $1.25 million—or more than two grand per square foot. (The median home value in Santa Cruz is $913,912.)

About Author: David Wharton

David Wharton, Online Editor at the Five Star Institute, is a graduate of the University of Texas at Arlington, where he received his B.A. in English and minored in Journalism. Wharton has over 15 years of experience in journalism and previously worked at Thomson Reuters, a multinational mass media and information firm, as Associate Content Editor, focusing on producing media content related to tax and accounting principles and government rules and regulations for accounting professionals. Wharton has an extensive and diversified portfolio of freelance material, with published contributions in both online and print media publications. Wharton and his family currently reside in Arlington, Texas. He can be reached at David.Wharton@DSNews.com.
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