What home-design trends will likely catch on in new construction? Builder Online recently spoke to Mollie Carmichael, principal at John Burns Real Estate Consulting, and Nick Lehnert, executive director at architecture firm KTGY, about the design trends that are gaining popularity in the new-home market this year:
Baby boomers, empty nesters, and Gen Yers are showing a preference for homes that have more private outdoor spaces, straying from the traditional "public" backyard, according to surveys. One way some builders are fulfilling this desire is by positioning the home's architecture strategically around the outdoor space to enclose it more and allow it to be more open to the interior living spaces. They also are creating more covered outdoor spaces.
The "Super Kitchen"
Besides being a place for cooking, the kitchen is also the entertainment/conversation area in a home. Open-kitchen layouts have continued to grow in popularity, putting kitchens more front-and-center and visibly exposed to other areas of the house. Kitchen islands are offering extra seating and prep space while larger pantries are offering greater storage. "As the hub, it becomes a consumer's dream to design these elements together with function, practicality, and flair," the designers say.
Bigger Media Hubs
More home owners are looking for a place for their large flat-screen television. Larger television sizes are prompting more builders to realize the need for greater wall space to hang the televisions and larger entertainment rooms to accommodate more seating.
Larger Garage Spaces
If home owners had their way, garages wouldn't be just for parking the cars. More home owners want spaces for hobbies and storage, and builders are taking notice by creating larger garages for multi-use purposes.
An office and den space is becoming a bigger desire among home buyers, and the location of it in the home is becoming increasingly important. Placing the home office off the entry is no longer considered the most practical location for it, but builders are experimenting with moving it closer to the "living" area, such as off the kitchen or the family room.
Two Homes in One
As multigenerational living gains popularity
, builders are responding by carving out more separate spaces for several generations to live together. For example, some builders are offering semi-independent suites with separate entries, bathrooms, and kitchenettes.
Posted By: Coach Henion
On the verge of retirement, where will those aged 55 and over choose to live? Realtor.com® recently analyzed Nielsen Demographics data to find the metro markets that will see the largest percentage of growth in residents aged 55 and over within the next five years.
Those 10 markets are:
Posted By: Coach Henion
Many households, particularly among younger professionals, are choosing to rent longer, despite surging rental costs. What is driving the sluggish transition from renting to home ownership?
- Williston, N.D.
- Gillette, Wyo.
- Summit Park, Utah
- Dickinson, N.D.
- Austin-Round Rock, Texas
- Junction City, Kan.
- Juneau, Alaska
- Andrews, Texas
- Elko, Nev.
- Raleigh, N.C.
survey of 344 renters from the New York Federal Reserve's Survey of Consumer Expectations shows that many renters have a desire to own, but access to credit remains a big hurdle preventing them from buying. About two-thirds of renters surveyed say they thought it would be somewhat or very difficult for them to get a mortgage, while only about 5 percent thought it would be easy.
The following are the top reasons that renters offered up for why they have chosen to rent rather than purchase a home, according to the survey:
- Do not have enough money saved or have too much debt (55.7%)
- Do not make enough money (52.7%)
- My credit is not good enough (41.4%
- Do not want the upkeep of home ownership (28.6%)
- Do not want to or can't be tied down to certain area (24.1%)
- More affordable to rent than buy (23.6%)
- Do not want to tie my money up in a house (18.7%)
"We see that the main reasons preventing renters from becoming owners are weak balance sheets (low savings or high debt), low income, and lack of access to credit," economists with the Federal Reserve Bank of New York write in the report. "Some cite inherent advantages of being a renter (such as low upkeep and more flexibility), but notably, few say that they do not want to own because they are concerned that house prices might fall."
About 60 percent of respondents surveyed say buying a property in their ZIP code is a good investment, and only 12 percent thought of it as a bad investment.
"Current renters are as bullish on housing as current owners — or perhaps even slightly more so," the report's authors note. "This optimism is also reflected in expectations about future house prices."
Renters have slightly higher expectations for home-price growth than owners. Renters surveryed say that in the next year, they expect home prices in their ZIP code to rise by 5.4 percent. Home owners say they expect a 3.8 percent rise.
"These findings suggest that with a stronger economy and eased credit standards, flows into home ownership would pick up," the authors note. "However, one caveat is that many potential buyers with relatively low credit scores — 35 percent of renters in our sample think that their credit score is below 680 — might now be discouraged, meaning that they are convinced that they would not be granted credit and thus may fail to apply for a mortgage even after an easing in standards. Also, relaxing credit standards may, of course, have undesirable consequences down the road, since borrowers with lower credit scores are at higher risk of default."
Posted By: Coach Henion
Determining the perfect asking price involves psychological reasons as much as practical reasons, The Wall Street Journal reports.
“When you set a list price, you’re sending a signal to the market,” says Michael Seiler, professor of real estate and finance at The College of William & Mary in Williamsburg, Va.
But pricing a home can be a “delicate balance,” says Mike McCann, a real estate professional with Berkshire Hathaway HomeServices, Fox & Roach in Philadelphia. You have to balance the comparables with sellers’ unrealistic expectations about what their home is really worth. Sellers often want to price a home higher than what the market can bare. On the other hand, some sellers or agents may be tempted to set the asking price low in the hopes of generating a buyer frenzy and quick sale.
What strategy works? Research offers a few insights into setting the right asking price.
- Getting too precise means you won’t budge. Pricing research suggests that setting an exact asking price — such as $795,475 — sends the message to buyers that the price is less negotiable than, say, a round number like $800,000. “Those using precise pricing show confidence in the price,” Seiler says.
- The number nine can be a big influence. Pricing a property at $499,900 rather than $500,000 can subconsciously influence a home buyer. The home “seems way cheaper,” Seiler says. Even if the home winds up selling above the asking price, the buyer will feel like they got a great deal with the initial lower asking price, Seiler says. “The goal is to make it stick in their head that you’re getting a bargain,” Seiler says. “It’s the way our brain looks at numbers.”
- Going low doesn’t always mean a higher selling price. While setting a lower asking price may generate a frenzy of offers, it won’t necessarily translate into a higher sales price. “It creates a havoc that doesn't serve anyone well," Rebecca Walter, a real estate professional with Redfin in Portland, Ore., told The Wall Street Journal. The lower price won’t necessarily increase what a buyer will offer, since some buyers may compete in other ways, like paying in all cash or waiving the inspection to produce a quicker sale, Walter says.
Posted By: Coach Henion