The trend among buyers favoring smaller homes with open and multifunctional rooms continued in 2010. But subtle changes in tastes, combined with ongoing shifts in household occupancy, could give alert builders and their product suppliers new opportunities over the next few years, as the housing market recovers and home buyers get back in the game in larger numbers.
Fresh surveys of consumer preferences, presented during a seminar on that topic at the International Builders' Show in Orlando, Fla., on Thursday morning, provided an in-depth look at what consumers are shopping for now and what they might be looking for in the future. While there were no eureka moments in the survey’s findings, they reaffirmed demographic factors that are influencing what is getting built these days and made clearer what features home buyers are seeking.
At the very least, consumers are approaching the home buying experience with a different attitude. “The sense of entitlement that people used to feel about having everything they wanted in their homes is being replaced by a sense of gratitude for things they already have,” says Jill Waage, editorial director of Better Homes & Gardens' Home Content Core.
Rose Quint, NAHB’s assistant vice president for survey research, laid the groundwork for this seminar by sharing projections about household formation and new-home construction. Projections of population growth—which is expected to rise to 322.4 million people in 2015, 336.8 million in 2020, and 422.6 million in 2050—suggest that demand for housing should remain vital. Over that time span, America’s Hispanic population will increase to 30% of the total, from 16% today; and people over 55 years old will account for 31% of the total, from 25%.
Houeseholds are getting smaller, too. One- and two-person households represented more than 63% of all households in 2010. And for the first time, married couples accounted for less than 50% of households, while unrelated adults living together increased to 6.2%.
In light of these statistics, the average size of a home completed declined last year to 2,377 square feet, from 2,438 square feet the previous year and 2,570 square feet in 2007. But Quint pointed out that the average size of a home started last year actually inched up a bit to nearly 2,400 square feet, although most of the bigger homes were started in the South and Midwest. “So this is by no means an phenomenon,” she said.
Quint shared new research in which the NAHB asked builders what they would be building in 2011. More than half, 52%, will build smaller homes, and nearly three fifths will build houses with less expensive price tags. Looking ahead to 2015, three quarters of the builders polled thought that single-family homes would continue to shrink (to around 2,152 square feet, on average); 68% thought they would be more energy efficient; but only 29% expect houses of the future to include more technology.
These builders expect that more one-story homes will be built, and more than half expect houses to combine living rooms with other rooms, with family rooms getting larger. (Thirty percent thought living rooms, per se, could vanish altogether). Among the features builders think more homes will include in the coming years are great rooms, low-E windows, double kitchen sinks, and programmable thermostats; indeed, a sizable percentage of builders expect more homes to be Energy Star rated.
However, 61% of builders polled expect the number of features offered as standard to decrease (compared to 32% who were asked the same question in 2007).
Waage followed Quint with a presentation that focused more specifically on the kinds of rooms and features buyers prefer, based on a survey, conducted last December, of 2,000 of her magazine’s readers who identified themselves as either planning to buy or remodel a home.
The survey found that buyers may have downsized as much as they’re going to, as 40% said their next home would be larger than what they live in today. Buyers are still looking for an affordable and energy efficient home with lots of storage space, but those criteria are slightly less important than they were for survey respondents in 2009.
Waage showed data that indicates buyers are taking a lot longer researching purchases and projects than they did only a few years ago. They are also prioritizing features, with efficient HVAC systems and appliances topping the list, followed by decks and patios, low-maintenance exteriors, and private backyards. They’re doing the same prioritizing for living spaces, with separate laundry, office, and storage rooms being most coveted.
However, don’t expect home buyers to overextend themselves: Better Homes’ survey found that 58.4% of readers polled are “extremely reluctant” to spend money they don’t have.
John Caulfield is senior editor for BUILDER magazine.
Learn more about markets featured in this article: Orlando, FL.