See our advertisements in Inside The City and Inside East Sac.
Check out the June issue of Home Matters "Streamlined Style" A 1930's Art Moderne house gets a very modern update. Designed and remodeled by Fugina Construction
Tuesday, June 14, 2011
Fugina Construction designs and remodels a 1930's Art Moderne Home in Land Park
See our advertisements in Inside The City and Inside East Sac.
Check out the June issue of Home Matters "Streamlined Style" A 1930's Art Moderne house gets a very modern update. Designed and remodeled by Fugina Construction
Tuesday, April 5, 2011
NET-ZERO ENERGY HOME BUILT BY KB HOME AND CREATED WITH MARTHA STEWART OPENS
2011 Builder Magazine Concept Home is a paragon of efficiency and full of “good things”
ORLANDO, Fla. (January 11, 2011) - Representatives from KB Home (NYSE: KBH), Martha Stewart Living Omnimedia (NYSE: MSO) and Builder magazine today unveiled the KB Home GreenHouse™: An Idea Home Created with Martha Stewart. The innovative and expertly-designed net-zero energy home is the 13th in Builder Magazine’s Concept Home series tradition that annually showcases an impactful and interesting new concept in homebuilding during the industry’s premier trade conference, the NAHB International Builders’ Show (IBS).
With the IBS set to begin tomorrow, the project partners hosted members of the media during a special event at the home. Members of the media were among the first to tour the KB Home Greenhouse and participated in a question and answer session with Martha Stewart, founder of Martha Stewart Living Omnimedia; Jeffrey Mezger, president and chief executive officer of KB Home; and Boyce Thompson, editorial director for Builder magazine.
“We’re excited to open this year’s home for tours,” said Boyce Thompson. “The KB Home GreenHouse embodies the Concept Home philosophy of bringing together some of the best minds in the business to create a project that has broad appeal, incorporates innovative new products and ideas and will serve to educate other homebuilders.”
Attendees were impressed with the elegantly traditional exterior, free flowing and inviting interior as well as the home design’s ability to bring the outdoors in via a telescoping patio door that spans the length of the kitchen and leads to a spacious lanai.
“We were happy to be a part of this project with KB Home,” said Martha Stewart. “It allowed us to build on our already successful partnership by creating the ultimate ‘green’ home that is not only environmentally friendly, but also beautiful, functional and affordable.”
In addition to its aesthetic appeal, the KB Home Greenhouse achieves a new dimension of environmentally friendly building for KB Home; it is the company’s first net-zero energy home, meaning it is intended to produce more energy than it consumes over the span of a year. As such, it has been labeled as a “Maximized Energy-Efficient Home” by the U.S. Department of Energy. Additionally, the home has been recognized with a variety of other green building achievements, including the U.S. Environmental Protection Agency’s ENERGY STAR® and WaterSense® qualifications, U.S. Green Building Council’s Leadership in Energy and Environmental Design® (LEED) for Homes Platinum rating and Environments for Living® green certification.
“In creating the KB Home GreenHouse, we were able to combine our industry-leading position in environmentally friendly building with our reputation for innovation," said Jeffrey Mezger. “With an established track record of building all ENERGY STAR homes in our new communities, we took this opportunity to go above and beyond and built a net-zero energy home that incorporates new ideas and technologies, including a real-time energy monitoring system and a solar thermal water heater, that we believe will one day be standard in all new homes.”
KB Home was recently recognized as the #1 Green Homebuilder for the second consecutive time by Calvert Investments. Participation in experimental projects like the Builder Magazine Concept Home was one of many criteria used by the firm in its evaluation of sustainable practices in the homebuilding industry.
New Homes in 2015 Will Be Smaller, With a Touch of Green
By: Stephani L. Miller
Architects and builders think new homes will continue to shrink under the driving forces of demographic shifts and other influences.
According to a recently released survey by the NAHB, residential architects and designers, home builders, and others involved in the new home construction sector believe that the home shrinkage phenomenon of the recession years won't be reversing as the economy regains steam, but is actually here to stay. The sentiment among the majority of respondents to the NAHB's "The New Home in 2015" survey is that the average new home will continue to shrink by as much as an additional 10 percent—to about 2,152 square feet—by mid-decade.
Smaller footprints and greener features ranked at the top of the trend list among survey respondents, with 74 percent saying homes will get smaller and 68 percent saying homes will get greener in 2015—far surpassing the other trends the survey evaluated: more technology (29 percent), greater accessibility (20 percent), and more outdoor living features (10 percent).
It's interesting to note, however, that the green features cited as most likely to be included in new homes in 2015 are largely the most cost-effective methods for achieving energy and resource efficiency. Survey respondents indicated that low-E windows, engineered wood components (joists, beams, and trusses), water-efficient fixtures, and Energy Star Home ratings are likely features.
"According to our experts, consumers are really looking to reduce their energy costs. When they say 'green' that's what they mean: reducing the cost of heating, cooling, and running their house," says Rose Quint, assistant vice president for survey research, NAHB Economics and Housing Policy. Because other, potentially higher-performing energy-saving features cost more up front and have longer payback periods, and because mortgage financing is still so tight, many of the other features that would increase the green quotient of a new home fall further down on consumer wish lists, according to respondents.
It's not just economics and energy costs driving the size reduction in new homes, the survey found. Consumer expectations and preferences also are shifting. Homes no longer hold the equity they once did, and homeowners no longer view their residence as an investment that will fund their retirement or help them upgrade to a larger home, according to Quint. Also a driving force toward smaller houses is the population of aging baby boomers seeking to downsize.
As earlier housing trend reports have indicated, the NAHB survey found that single-purpose or special-function rooms (media and hobby rooms, mudrooms, dining rooms) are far less likely to be included in the new homes of 2015. The great room is again on the rise, combining a house's main living and entertaining space, workspace, and cooking/eating space. It was ranked the most likely room to be included in the average new home in 2015. The only area deemed likely to grow in the next five years, according to the survey, is the family room. Fifty-two percent of survey respondents said the living room will merge with other spaces, while 30 percent said it will vanish altogether.
"People have become more realistic about their needs, and they're going to base their purchases on needs rather than wants and lifestyle preferences," Quint says. "A house becomes less expensive when you take away walls and combine multiple living spaces into one room. It also allows for a sense of greater volume within a shrunken footprint."
Interestingly, while more universal design features were deemed only somewhat likely to be included, survey respondents' comments indicated that accessibility will be planned for in more subtle ways than creating a house that's fully accessible at time of sale. Rather, the infrastructure to ease future accessibility retrofits and renovations will be provided in new homes of 2015—which incidentally will play an increasingly important role in the remodeling industry.
Read more findings from "The New Home in 2015" report on HousingEconomics.com.
Architects and builders think new homes will continue to shrink under the driving forces of demographic shifts and other influences.
According to a recently released survey by the NAHB, residential architects and designers, home builders, and others involved in the new home construction sector believe that the home shrinkage phenomenon of the recession years won't be reversing as the economy regains steam, but is actually here to stay. The sentiment among the majority of respondents to the NAHB's "The New Home in 2015" survey is that the average new home will continue to shrink by as much as an additional 10 percent—to about 2,152 square feet—by mid-decade.
Smaller footprints and greener features ranked at the top of the trend list among survey respondents, with 74 percent saying homes will get smaller and 68 percent saying homes will get greener in 2015—far surpassing the other trends the survey evaluated: more technology (29 percent), greater accessibility (20 percent), and more outdoor living features (10 percent).
It's interesting to note, however, that the green features cited as most likely to be included in new homes in 2015 are largely the most cost-effective methods for achieving energy and resource efficiency. Survey respondents indicated that low-E windows, engineered wood components (joists, beams, and trusses), water-efficient fixtures, and Energy Star Home ratings are likely features.
"According to our experts, consumers are really looking to reduce their energy costs. When they say 'green' that's what they mean: reducing the cost of heating, cooling, and running their house," says Rose Quint, assistant vice president for survey research, NAHB Economics and Housing Policy. Because other, potentially higher-performing energy-saving features cost more up front and have longer payback periods, and because mortgage financing is still so tight, many of the other features that would increase the green quotient of a new home fall further down on consumer wish lists, according to respondents.
It's not just economics and energy costs driving the size reduction in new homes, the survey found. Consumer expectations and preferences also are shifting. Homes no longer hold the equity they once did, and homeowners no longer view their residence as an investment that will fund their retirement or help them upgrade to a larger home, according to Quint. Also a driving force toward smaller houses is the population of aging baby boomers seeking to downsize.
As earlier housing trend reports have indicated, the NAHB survey found that single-purpose or special-function rooms (media and hobby rooms, mudrooms, dining rooms) are far less likely to be included in the new homes of 2015. The great room is again on the rise, combining a house's main living and entertaining space, workspace, and cooking/eating space. It was ranked the most likely room to be included in the average new home in 2015. The only area deemed likely to grow in the next five years, according to the survey, is the family room. Fifty-two percent of survey respondents said the living room will merge with other spaces, while 30 percent said it will vanish altogether.
"People have become more realistic about their needs, and they're going to base their purchases on needs rather than wants and lifestyle preferences," Quint says. "A house becomes less expensive when you take away walls and combine multiple living spaces into one room. It also allows for a sense of greater volume within a shrunken footprint."
Interestingly, while more universal design features were deemed only somewhat likely to be included, survey respondents' comments indicated that accessibility will be planned for in more subtle ways than creating a house that's fully accessible at time of sale. Rather, the infrastructure to ease future accessibility retrofits and renovations will be provided in new homes of 2015—which incidentally will play an increasingly important role in the remodeling industry.
Read more findings from "The New Home in 2015" report on HousingEconomics.com.
Friday, March 4, 2011
Green Depot Acquires Ecohaus
Deal adds three West Coast stores to NYC-based green building materials dealer.
By: Craig L. Webb
Green Depot, which dubs itself the nation's biggest building material dealer specializing in environmentally sustainable building products, grew even larger Monday when the New York-based company announced it has acquired Ecohaus, a similar operation with locations in Seattle, San Francisco, and Portland, Ore.
The deal creates "the first one-stop supplier for green building materials with a nationwide footprint for distribution and delivery," Green Depot said in a news release. The move comes 15 months after Green Depot established a Chicago beachhead with the acquisition of Greenmaker Supply. (Related story)
Green Depot currently has 10 showrooms in the New York boroughs of Manhattan and Brooklyn; Boston; Manchester, N.H.; Albany, N.Y.; Long Island, N.Y.; Newark, N.J.; Philadelphia; Newark, Del.; and Chicago. It also serves customers through its website and claims 33 warehouse distribution centers as a result of its relationship with the Marjam supply house. (Related story)
Established in 1992, Ecohaus "has been a pivotal player in the industry, introducing eco-friendly products to consumers and working with innovators in the field to bring high-quality, sustainable products to market," the announcement stated.
"Our core values and passion align completely," said Green Depot founder Sarah Beatty. "By joining forces with Ecohaus, Green Depot is strongly positioned for continued growth throughout America. We’re delighted to combine resources and work together to achieve our shared vision for a diverse, sophisticated Green supply chain--and a sustainably thriving America."
Ecohaus CEO David Silverglide said the deal builds on the West Coast's well-known appreciation for green products and "opens up promising new avenues to feed the demand for affordable, healthy, and sustainable product solutions across the country."
While the earlier deal with Greenmaker Supply called for that company to keep its name, the Chicago store eventually was renamed Green Depot. In contrast, Ecohaus' website already points to Green Depot's and it appears clear that the West Coast stores will take the Green Depot name.
Friday, January 28, 2011
Buyer Survey Says: Smaller Homes With More Open Spaces
Consumer preferences are examined in the latest studies conducted by the NAHB and Better Homes & Gardens.
By: John Caulfield
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.
By: John Caulfield
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.
2011 Builders' Show Preview
12 green products from the residential construction industry’s largest event
The International Builders’ Show returns to Orlando, Fla., next week. As always, hundreds of manufacturers will be on hand showcasing new wares for the residential contractor, including an array of options for sustainably minded builders. Here’s a look at 12 green products that will be on display.
Click here for slideshow.
The International Builders’ Show returns to Orlando, Fla., next week. As always, hundreds of manufacturers will be on hand showcasing new wares for the residential contractor, including an array of options for sustainably minded builders. Here’s a look at 12 green products that will be on display.
Click here for slideshow.
Wednesday, December 29, 2010
Baby Boomers, Gen Y, and the Recession Shift Long-Held Housing Tastes and Trends
The economy and jobs are reshaping the household picture, a ULI panel says, as Gen Yers delay buying and boomers age in place. Among all groups, walkability and transit dominate the wish list.
By:Katy Tomasulo
As the housing industry continues to claw its way out of the downturn, the recession and unemployment picture are dramatically influencing the way consumers view homeownership, according to the “Housing in America” panel during ULI’s fall conference in Washington, D.C. As the country’s two largest demographic groups—baby boomers and Generation Y—reassess priorities, household formation is down; tastes and demands are shifting toward walkable, transit-oriented communities; and the overall buyer profile within age groups is simply not as cut-and-dried as it once was.
Even as housing recovers, we’re not going to return to the same trends and tastes, says John McIlwain, senior resident fellow at ULI. “What people will want … will be substantially different.”
Among all age groups, the economy continues to be the chief driver. The jobs outlook is not only impacting sales and inventory, but also household formation, which has dropped to 25% of the norm, McIlwain reports, stemming from a decrease in immigration and the recession forcing young adults to live with their parents (or even vice versa). This trend, he says, won’t reverse until unemployment begins to drop.
Though the recession hit everyone hard, its impact on Gen Y will likely have the most long-lasting influence on housing trends. With 83 to 85 million people born from 1981 to 1999, it’s the largest demographic group the country has ever had, and therefore has massive buying potential. Problem is, they’re also the most economically constrained, McIlwain says, with a 30% unemployment rate and an average $23,000 post-college debt. They’re not saving for a down payment, and their parents, struggling to recover their own retirement savings, can’t help.
As a result, this age group’s view of the American Dream of homeownership is vastly different. “People in the youngest generation have seen the struggles family and friends are going through, and the assumption of the house as a wealth generator is very different,” says Marty Jones, president of Corcoran Jennison Cos.
Richard Koss, director of economics at Fannie Mae, found similar changes in consumer surveys conducted during the past year. In January, 70% of consumers surveyed viewed homeownership as a safe investment; by July, that percentage had dropped to 67%; in 2003, confidence was as high as 83%.
The combination of these factors, McIlwain says, will likely lead to unprecedented rental rates during the next 10 years.
GEN Y OPTIONS
To meet the challenge, developers and builders must find a way to provide products that Gen Yers can afford in locations they desire. Among their wants and needs:
Urban settings or, if suburban, walkable town centers and mixed-use communities. They desire smart growth and density, and are willing to accept a less ideal home if they can walk to work and retail.
A focus on work-life balance and connectivity.
WINKs: Woman with income, no kids. This group, typically 26 to 29 years old, is highly educated. They’re renters, but are likely to buy before marriage. Like others, they desire walkable neighborhoods near transit.
More young adults are delaying marriage; 85% of household growth will be households without kids, says Charles Hewlett, managing director of real estate advisor Robert Charles Lesser & Co.
BABY BOOMER TRENDS
Baby Boomers begin turning 65 next year. Here is how this group will continue to impact housing trends:
They’re retiring earlier than previous generations; however, many still work, either part-time, in a lower-level position, or as a consultant.
Many will age in place; however, in 10 years, we will see increased demand for seniors housing as the first wave reaches the mid and late 70s.
The earlier prediction that baby boomers will move to downtown urban areas has not happened, Hewlett says. But they are looking for what he calls “safe urbanism”—walkable, denser areas with transit.
They want locations with an affordable cost of living and quality healthcare. Both of these factors trump climate, Hewlett notes.
They look for communities with opportunities for continuing education, culture, and an active lifestyle.
They still count Florida and Arizona among the top five retirement locations, but the Carolinas, with slightly cooler temperatures and lower threat of hurricanes, are becoming their new Florida, Hewlett says.
ADDITIONAL INFLUENCERS
Among the challenges and trends across markets:
Golf course communities are out; conservation communities with passive open space and trails are in.
Walkable, transit-oriented communities or those with town squares are “going to be a key part of creating projects that attract interest,” says Jones.
Immigration will continue to be a huge housing influencer; however, where previous generations settled in urban areas, many new immigrants are heading straight for suburbs, says Hewlett.
In the rental market, green is still being driven more by investors than consumers, Jones reports.
The U.S. will grow by another 100 million people by 2040, and 60% of that will come from just 20 metro areas, primarily in the coastal areas and the south.
Finally, there’s the question of what will happen to the McMansion. In new construction, too-large houses have fallen out of favor—but what about existing homes? The vast gap in numbers from baby boom to Generation X, along with continued economic woes and shifting tastes, left one panelist to wonder who will buy baby boomers’ larger houses and what further impact those properties will have on buying trends over the next few years. Stay tuned.
Katy Tomasulo is Deputy Editor for EcoHome.
By:Katy Tomasulo
As the housing industry continues to claw its way out of the downturn, the recession and unemployment picture are dramatically influencing the way consumers view homeownership, according to the “Housing in America” panel during ULI’s fall conference in Washington, D.C. As the country’s two largest demographic groups—baby boomers and Generation Y—reassess priorities, household formation is down; tastes and demands are shifting toward walkable, transit-oriented communities; and the overall buyer profile within age groups is simply not as cut-and-dried as it once was.
Even as housing recovers, we’re not going to return to the same trends and tastes, says John McIlwain, senior resident fellow at ULI. “What people will want … will be substantially different.”
Among all age groups, the economy continues to be the chief driver. The jobs outlook is not only impacting sales and inventory, but also household formation, which has dropped to 25% of the norm, McIlwain reports, stemming from a decrease in immigration and the recession forcing young adults to live with their parents (or even vice versa). This trend, he says, won’t reverse until unemployment begins to drop.
Though the recession hit everyone hard, its impact on Gen Y will likely have the most long-lasting influence on housing trends. With 83 to 85 million people born from 1981 to 1999, it’s the largest demographic group the country has ever had, and therefore has massive buying potential. Problem is, they’re also the most economically constrained, McIlwain says, with a 30% unemployment rate and an average $23,000 post-college debt. They’re not saving for a down payment, and their parents, struggling to recover their own retirement savings, can’t help.
As a result, this age group’s view of the American Dream of homeownership is vastly different. “People in the youngest generation have seen the struggles family and friends are going through, and the assumption of the house as a wealth generator is very different,” says Marty Jones, president of Corcoran Jennison Cos.
Richard Koss, director of economics at Fannie Mae, found similar changes in consumer surveys conducted during the past year. In January, 70% of consumers surveyed viewed homeownership as a safe investment; by July, that percentage had dropped to 67%; in 2003, confidence was as high as 83%.
The combination of these factors, McIlwain says, will likely lead to unprecedented rental rates during the next 10 years.
GEN Y OPTIONS
To meet the challenge, developers and builders must find a way to provide products that Gen Yers can afford in locations they desire. Among their wants and needs:
Urban settings or, if suburban, walkable town centers and mixed-use communities. They desire smart growth and density, and are willing to accept a less ideal home if they can walk to work and retail.
A focus on work-life balance and connectivity.
WINKs: Woman with income, no kids. This group, typically 26 to 29 years old, is highly educated. They’re renters, but are likely to buy before marriage. Like others, they desire walkable neighborhoods near transit.
More young adults are delaying marriage; 85% of household growth will be households without kids, says Charles Hewlett, managing director of real estate advisor Robert Charles Lesser & Co.
BABY BOOMER TRENDS
Baby Boomers begin turning 65 next year. Here is how this group will continue to impact housing trends:
They’re retiring earlier than previous generations; however, many still work, either part-time, in a lower-level position, or as a consultant.
Many will age in place; however, in 10 years, we will see increased demand for seniors housing as the first wave reaches the mid and late 70s.
The earlier prediction that baby boomers will move to downtown urban areas has not happened, Hewlett says. But they are looking for what he calls “safe urbanism”—walkable, denser areas with transit.
They want locations with an affordable cost of living and quality healthcare. Both of these factors trump climate, Hewlett notes.
They look for communities with opportunities for continuing education, culture, and an active lifestyle.
They still count Florida and Arizona among the top five retirement locations, but the Carolinas, with slightly cooler temperatures and lower threat of hurricanes, are becoming their new Florida, Hewlett says.
ADDITIONAL INFLUENCERS
Among the challenges and trends across markets:
Golf course communities are out; conservation communities with passive open space and trails are in.
Walkable, transit-oriented communities or those with town squares are “going to be a key part of creating projects that attract interest,” says Jones.
Immigration will continue to be a huge housing influencer; however, where previous generations settled in urban areas, many new immigrants are heading straight for suburbs, says Hewlett.
In the rental market, green is still being driven more by investors than consumers, Jones reports.
The U.S. will grow by another 100 million people by 2040, and 60% of that will come from just 20 metro areas, primarily in the coastal areas and the south.
Finally, there’s the question of what will happen to the McMansion. In new construction, too-large houses have fallen out of favor—but what about existing homes? The vast gap in numbers from baby boom to Generation X, along with continued economic woes and shifting tastes, left one panelist to wonder who will buy baby boomers’ larger houses and what further impact those properties will have on buying trends over the next few years. Stay tuned.
Katy Tomasulo is Deputy Editor for EcoHome.
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