- Eclipse Cottages builds spacious, energy-efficient tiny homes in South Carolina.
- The company is rolling out financing meant to help people own a home for as low as $99 a month.
Ronald Wells has been a self-proclaimed tiny-home aficionado for years, so when it came time for the 55-year-old, who goes by Blue, and his wife, Pamela, to sell their big house in Atlanta and downsize, he knew exactly what he wanted.
He chose Eclipse Cottages to build a 600-square-foot abode in Travelers Rest, South Carolina, at the foothills of the Blue Ridge Mountains. With a design that includes 1 ½ bathrooms, 16-foot ceilings, and a 6-foot-tall loft, Wells says, his tiny home has more space than a typical one.
Wells and his wife paid for their cottage with $110,000 in cash. Their housing costs, including rent for the lot, electricity, water and WiFi, total about $500 a month, compared with the $5,000 worth of expenses for his former home in Atlanta.
The Greenville, South Carolina-based Eclipse, which began with $600,000 in angel funding, believes like other tiny home builders that its product can be a solution to the crisis in housing affordability by offering homes with modest ownership costs. The company has three communities of tiny homes — two in Travelers Rest and one in Alcolu, South Carolina — and more on the way.
Affordability has also taken a hit from high interest rates. But Eclipse has a plan for that: $99-a-month financing that it hopes will have generational appeal for older Americans, who own most of Eclipse's homes now, as well as millennials and Gen Zers who may lack savings.
The financing is expected to become available starting in January. Under the plan, wealthy investors will purchase the properties in return for tax credits on solar panels and other energy-efficient technology used in the construction, Draplin said. The investors then finance buyers at the $99 monthly price, he said.
"The technology that goes into the homes that we build to make them efficient has opened up new opportunities," Draplin said. "It usually works for both parties, because most of our end users aren't billionaires that can use all these credits."
With homeownership becoming increasingly out of reach, the technology-research firm Technavio expects the tiny-home market worldwide to grow by about 4.45% a year from 2021 by 2026, or about $3.57 billion in total. North America would account for 59% of that growth.
It makes sense: Tiny homes can cost as little as $10,000. Luxury tiny homes, like the ones Eclipse offers, are still far below the typical single-home price of $425,000, according to Realtor.com.
With interest rates soaring this year, younger people are struggling to afford even tiny homes, Draplin said. He says he's heard from many of them who are inspired by the tiny-home lifestyle but can't afford the up-front cost or a high-interest mortgage.
"The younger demographic that's very interested in this lifestyle still can't afford it because you need $20,000 to $30,000 down," he said. "With the financing that we're going to offer, I think it's going to be a huge change in the demographics of our community."