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With Upturn, Homes Are More Specialized and Technologically Savvy

The residential turnaround has finally crept into nearly all housing sectors.

By Kermit Baker, Hon. AIA
AIA Chief Economist

With the national recovery of the housing market has come a return to larger and more expensive homes. Residential architects are reporting more specialized uses of space and the growing interest in special function rooms. Examples include outdoor living spaces, mud rooms, in-law suites, and safe rooms. With more specialized uses of space has come an increased interest in special features, many of which provide greater accessibility for an aging population. New technologies are also seeing a dramatic increase in popularity, both in new and remodeled homes. Popular new products offer greater energy efficiency and often provide households with fewer maintenance obligations.

These are some of the key findings from the AIA’s Home Design Trends Survey from the second quarter of 2013. Business conditions have been steadily trending up since early 2012, and—given the strong levels of inquiries for new projects, the growing levels of project backlogs, and the uniformly strong readings from firms across all regions of the country—workloads for residential architects promise to remain strong in the quarters ahead. During the past year, residential architects have reported a recovery in virtually every residential construction sector. Coupled with already strong readings in home improvement activity, there now is a very strong base for future improvement in market conditions.

Special function rooms rebound in popularity

As home sizes shrank during the housing downturn, special function rooms were particularly hard hit. Many households view special function rooms as discretionary, and therefore easier to eliminate as homes were downsized. Now that average home sizes are growing again, interest in special function rooms is beginning to reemerge.

Rooms that have seen particularly strong growth in popularity over the past year are outdoor living areas and rooms, and mud rooms/drop zones. Almost 63 percent of residential architects surveyed report that interest in outdoor living areas/rooms are increasing, while fewer than 2 percent report interest to be declining. For mud rooms/drop zones, more than 45 percent of respondents report increased interest, while only about 1 percent report a decline. For both of these areas, scores are well up from year-ago levels.

Au pair/in-law suites have likewise seen an increase in interest from year-ago levels. Storm rooms/safe rooms/hidden rooms are now reported to be increasing in acceptance, reversing the trends seen one year ago. Home offices are seeing more stable levels of interest from a year ago as well. While part-time and full-time telecommuting is likely just as prevalent, home offices are also common options for consultants and temporarily unemployed workers. But with the payroll numbers beginning to pick up, this may reduce the interest in home offices (Figure 1).

The increased enthusiasm in outdoor living has pushed this special function room to the top of the most popular list. A year ago, over a third of residential architect respondents rated home offices as the most popular special function room, a share that has fallen to just over 22 percent with this survey. Au pair/in-law suites have also increased in the rankings of the most popular special function rooms. With more workers in the workforce, the need for live-in child care is on the rise. Also, aging parents living with their children have generated interest in these spaces (Figure 2).

Home features and systems reflect changing household needs

With a graying population, both home occupants and their guests have changing housing needs and preferences. For multiple-floor homes, a master bathroom and a full bath on the ground floor are generally desired. Additionally, ramps (rather than steps) to enter homes, a home elevator to move between floors, easy-to-use home features (such as door handles and faucets), and non-slip floor surfaces all made the list of popular home features. Each of these features was seen as increasing in popularity at an accelerated pace. On-grade entry to the home—therefore limiting the need for ramps—was an added option on this year’s survey, and residential architects noted the growing popularity of this feature.

Still, there are other motivations for special home features. Energy efficiency remains a popular objective for most households, so extra insulation is a popular and cost-effective feature. Also added to this survey was providing accommodations for multiple generations in the home, which also turned out to be a popular choice of respondents. (Au pair/in-law suites are one way to achieve this objective, as is a separate accessory unit in an outbuilding. It may also mean converting a den, basement, or attic area to a bedroom or living area for extended family members.) Finally, with the recent increase in storms, hurricane-resistant designs are increasing in popularity, even in areas where these features are not required by local building codes (Figure 3).

New technologies in the home

With the increasing dependence on technology in the economy, it’s not surprising homeowners are seeing more of these applications in their homes. Systems and technologies that are growing in popularity may be designed to enhance entertainment systems, energy management, and security, or just for convenience.

At the top of the list are wireless telecommunications/data systems. While over 63 percent of respondents reported that these systems were increasing in popularity, hardly any reported them to be declining. Residential architects have rated wireless systems as among the most popular systems/technology in homes for the past several years.

Likewise, energy management systems have been reported as perennially popular by residential architects. Recent wireless applications have given households remote capabilities to manage basic households systems such as lighting, temperature, and security controls. Other systems and technologies that are emerging in popularity include backup power generation systems and electrical docking stations for cars. Once electric vehicles become more pervasive, these systems are likely to mushroom in popularity (Figure 4).

Residential architects rated low-maintenance materials as the product category increasing the most in popularity recently, while synthetic materials used for applications such as flooring, siding, or decking also rated highly. Popular new products in the home also promote goals such as energy efficiency, convenience, water conservation, and healthy homes (Figure 5).

Business conditions very strong

Business conditions at residential architecture firms generally hit bottom around the middle of 2011, and have been improving since. Slow growth in billings in 2012 has transitioned to more rapid growth through the first half of 2013. The residential billings score of 66 in the second quarter reflects the 43 percent of firms indicating that billings increased, as compared to 12 percent reporting a decline. The remaining 45 percent of firms indicated no significant change in billings. Inquiries for new projects have seen even stronger growth, suggesting that future workloads will continue to grow (Figure 6).

With improving business levels, residential firms have been able to slowly rebuild project backlogs. Firms were averaging 4.2 months of work in-house during the second quarter, about 1.5 months more than they averaged in mid-2010. Still, firms are more comfortable with backlogs in the 4.5 to 5.0 month range, giving them some buffer against future slowdowns (Figure 7).

The national upsurge in billings at residential architecture firms is reflected across the four major regions of the country. In the second quarter, residential firms in the Midwest and West reported the strongest growth in activity (Figure 8).

Construction upturn finally spreads across sectors

The residential construction upturn has unfolded incrementally by sector. Residential architects working on improvements to existing homes—kitchen and bathroom remodels, and additions and alterations—experienced only a brief setback. Their work in the new construction sectors saw much more significant downturns.

As of the second quarter, virtually all of the residential construction sectors have now recovered. Residential architects began reporting growth for the first-time buyer and trade-up buyer sectors in the third quarter of last year. The custom and luxury sector saw upturns in the next quarter, and the townhouse and condo market saw improvements in the quarter after that.

With the second-quarter results, residential architects are reporting even more improvement in each of these four sectors. The trade-up market is seeing the strongest gains, with almost half of respondents reporting improving market conditions, in comparison to just 13 percent reporting weakness. For the second-home market, however, residential architects are still reporting negative conditions, even though there has been significant moderation in the downturn. Given that many second homes have at least some investment motivation, it’s not surprising that the decline in home prices nationally during the downturn has negatively affected the second-home market the most.

Improvements to existing homes have continued on as the sector seeing the strongest growth, according to residential architects. Some of this spending comes from fixing up previously distressed properties; others come from owners who have decided that market conditions are not yet optimal for a sale and want to make the necessary improvements to their current home. Additionally, there is more interest in homes in established infill locations, which generally involves investing in an older existing housing unit (Figure 9).

 

View the Home Design Trends Slideshow

   
 
     

Recent Related:

Larger Homes with More Outdoor Amenities Are Squeezing into Smaller Lots

Kitchens and Baths Benefit from Broader Housing Recovery, Feature New Functions and Activities


Density and Accessibility, with Growing Interest in Neighborhood Amenities, Define Community Design Trends


Special Function Rooms and Features Fall Away as Housing Market Continues Slow Recovery

Reference:

Visit the Housing Knowledge Community homepage on AIA KnowledgeNet.

The HDTS panel is open only to principals, partners, and other firm leaders of AIA member–owned firms with a residential specialization. Apply to join the HDTS panel by completing a brief background information form on your firm here.

Visit the AIA Research Resource Center.

 
 

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