The Housing Chronicles Blog: New home interiors adapting to a changing market

Friday, February 19, 2010

New home interiors adapting to a changing market

For years we’ve been hearing about gradual changes in the interior preferences of homebuyers, but during the boom years many builders stuck with the tried and true rather than risk their production schedules – and profit margins – on risky changes. Of course with discounted short sales and foreclosures continuing to dominate most local housing markets, new homes not only have to be competitively priced, but offer updated design cues and interior amenities.

Perhaps the biggest change today is that, on average, new homes are getting smaller after nearly doubling during the previous generation. According to a 2009 survey by the NAHB, 58% of potential buyers reported a preference for smaller homes with high-quality materials, and between 2007 and 2009 the desired square footage shrank from 2426 to 2292 square feet.

Although many production builders are getting ahead of this trend by ditching the status-seeking sweeping staircases, grand foyers and attention-getting fireplaces, Marianne Cusato, designer of the famous “Katrina Cottages” of 300 to 1800 square feet now available at Lowe’s, has introduced a “New Economy Home” for a larger audience.

At a reasonable 1676 square feet, Cusato’s design offers a flexible downstairs suite that can morph from a family room or office into a rental unit or a downstairs master bedroom in conjunction with an owner’s needs (and even, as she suggests, allow a divorced couple to share the house if finances are tight). What’s missing from her plans, of course, are features which might look nice but add little to a home’s utility value, such as long hallways, giant master suites, media rooms and that now-dated scion of the early 2000s – the Roman tub.

One key demographic group with design as a primary component of a home buying decision is Generation Y. While a large portion of this group may currently be doubled up with roommates in apartments or have temporarily boomeranged to live back with their parents, when the economy rebounds they’ll want their first taste of freedom in both stylish rentals and for-sale homes.

Importantly, for this cohort less is more, meaning clean lines and contemporary styling accented with bold colors against neutral backgrounds. Since both the Generation X and Y value social opportunities, builders can do a lot by properly merchandising small spaces for casual entertaining with the use of game tables and flat screen TVs.

Although the kitchen still remains the activity hub for most parties, the best designs create interactive flow with an adjacent family room by substituting breakfast bars for walls. And with outdoor spaces such as patios, yard and balconies increasingly becoming part of the overall entertaining experience, they should not only interact well with traditional interior rooms but also be easy to furnish.

For Gen Y, Gen X and Baby Boomers combined, they’re also increasingly demanding home offices or dedicated workspaces in lofts and alcoves, yet desire homes which require little maintenance and offer flexibility for a multi-tasking lifestyle.

And, while numerous surveys have demonstrated that buyers don’t want to pay more for green features, they still want to see them at least offered as an option (and one way to show a builder’s green credibility is to always offer appliances with an Energy Star label).

In the end, today’s more sophisticated buyers seem to be bringing a list of opposites to the sales table: homes that are both social hubs and sanctuaries, homes that are green but don’t cost any more, and homes that are well-designed but exclude pricey upgrades and options they can’t recoup when they re-sell. But for those builders who step up to that plate and are willing to swing, future riches may indeed await.

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