Wednesday, May 11 2011
With new-home sales down drastically the last few years, builders are scrambling to re-evaluate what buyers today want in new homes. Changing demographics and tighter lending standards are influencing buyers’ purchasing decisions when home-shopping and changing their priorities, industry experts say.
“There is a lot of pressure today to retool,” says Steve Brooks, CEO of Grand Homes. “We have to redesign houses and figure out what kind of product people would want to buy.”
For example, more younger buyers are bypassing the typical suburban tract of homes and showing a stronger preference for urban-style homes closer to the city.
“Trying to keep doing the same cookie-cutter houses is going to be increasingly difficult,” says James Gaines, an economist at the Real Estate Center at Texas A&M University. “Home builders worry that the demand pool for the suburban home with the quarter-acre lot and the fenced back yard will be shrinking.”
Younger buyers also are saying they don’t need a ton of extra space in a home and that they want spaces configured differently in homes, builders say.
For example, the living room is on it’s way “out,” builders say, as more home owners instead show a preference toward a game room or media room. Plus, more home owners are finding they don’t need a fourth bedroom, which was once in high demand.
However, not all builders believe the “buying small” trend will last.
“With our typical single-family buyers, we’re not seeing them willing to give up much room,” says Bill Darling, a builder in Plano, Texas. “We have seen them willing to put fewer bells and whistles in the homes.”
Some builders are focusing on ways to cut maintenance costs of home ownership too by setting out to build more homes that are more energy efficient.
Source: “Stumped Builders Adjust Their Designs,” RISMedia (May 9, 2011) http://www.realtor.org/RMODaily.nsf/pages/News2011050902?OpenDocument