RESIDENTIAL CONSTRUCTION – The New Normal – Homebuilders adjust to changing market, consumers’ needs
Based on foot traffic at two recent Valley Home Builders Association events, Dennis O’Brien, president of O’Brien Builders of Hortonville, has plenty to be optimistic about.
“Consumers are getting excited again about whether they want to build new or even remodeling their own home,” he says. “Things are definitely looking better than they were the past three years.”
Scott Winfield Swick, president of Winfield Homes in Fond du Lac, says the market is especially hot for new homes worth more than $235,000. “It’s definitely more active in the higher end of the market. Part of that is they have better overall finances usually so it’s easier to secure the credit needed to build,” he says.
The numbers bear out the builders’ optimism.
VHBA executive vice president Christine Shaefer says the months of December 2011, January 2012 and February 2012 all posted numbers higher than the previous year. “We don’t anticipate the numbers we saw back in 2005 or 2006, but people are adjusting to the situation we’re in and they want to move forward and build.”
As a point of reference, housing starts in the 13 communities known as the Fox Cities were 577 in 2007 and 272 in 2011.
While more people may have the desire to build new homes, two factors are holding them back – the inability to secure financing and the worry about selling their current home in a slow real estate market, Shaefer says.
“Money is available, but you need to have good credit,” she says. “Remodeling is a big area of business. Nationwide, expenditures related to remodeling outpaced that of new construction.”
With people waiting longer to buy their first homes because of financial or other reasons, multi-family projects are growing in popularity. Across the New North, new apartment complexes are going up to meet the growing demand. “I think we’ll continue to see growth in that sector,” Shaefer says.
While some parts of the country are flush with empty spec homes, that’s not the case here, Shaefer says. “In the Valley, we didn’t overbuild as much as they did in other markets. We don’t have this huge glut of spec homes sitting on the market,” she says. “Homebuilders are still doing spec homes, but not as much as before.”
Keeping up with the trends
But for consumers ready to move ahead with building a new home, the options are endless, O’Brien says.
“For people building now, it’s all about efficiency – efficiency with energy, cost and space,” he says.
When it comes to energy efficiency, builders are doing more than just adding more insulation – they are using new house wrapping techniques, for example, and installing energy efficient doors and windows.
When it comes to space, homeowners are realizing that less is more. Shaefer says that nationwide, new homes are smaller than the ones built 10 or 20 years ago. “People prefer a more compact footprint and they want a home that’s obtainable and something they can afford,” she says.
Nationwide, the average home size was 2,521 square feet in 2007 compared with 2,392 square feet in 2010.
O’Brien says homeowners are trying to make the main floor footprint smaller and looking to add finished spaces above garages and in the basement. “People want the most for their money. It’s all about needs vs. wants,” he says.
While homes overall may be a bit smaller, one part of the home is getting larger – the kitchen. “Kitchens are definitely growing in size in proportion to the rest of the home,” O’Brien says. Swick says consumers are very interested in an attractive “living triangle” – defined as the great room, a dining area (often a part of the kitchen) and kitchen. “Kitchens are the most important room in the house and they want a home that brings the main living space, eating space and kitchen together in a way that flows,” he says.
New homeowners are also attracted to expanding living space by heading outside and creating small, private outdoor spaces. “The goal is to seamlessly blend the inside and outside spaces,” says O’Brien, adding that outdoor areas with fireplaces, a bar, grill and even space for a TV are on many homebuyers’ wish lists.
Consumers building homes are also looking to the future and “aging in place,” O’Brien says. They’re considering features such as three-foot-wide doors, barrier-free entryways and larger showers that all accommodate someone using a wheelchair or a walker.
When O’Brien featured a barrier-free home during a recent Parade of Homes, the level of interest was surprising, as were the comments. “People – of all ages – liked not having to step up between the garage and the house, for example. I think people really like the idea of staying home as long as possible and if they build amenities into their home that allow them to do that, they will,” he says.
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