Back to Basics: The Future Home as Shelter vs. Showpiece

Rich Walker
May 13, 2011
COLUMN : Industry Watch | Markets & Trends

Given the state of the economy in general and the housing construction industry in particular, the high-ticket preferences that transformed living spaces during the housing boom appear to be giving way to more practical, dollar-conscious ones.

The 2015 Home
Results of the National Association of Home Builders’s “The New Home 2015” survey of builders, published in December 2010, reinforce this analysis based on the predicted characteristics of the average, new single-family detached home in 2015. Among the study’s key findings is that by 2015, the average single-family home is expected to get smaller and have more green features, more technology features and more features enabling accessibility and outdoor living. Overall, 63 percent expect the average new home in 2015 to be between 2,000 and 2,399 square feet–down from the 2007 peak of 2,521 square feet.

Although part of this reduction may be attributable to hard economic times, a number of factors lead building professionals to expect home size to continue declining: a focus on lowering the cost of heating and cooling, demographics (29 percent of the U.S. population will be 55+ by 2020, demanding smaller homes) and concern over diminished equity appreciation. As Chicago Tribune columnist Mary Umberg put it, these factors “will weigh on the consumer to purchase homes based on need more than want.”

Feature-wise, the NAHB survey indicates that most new homes will have some variant of a “great room” (combined kitchen-family-living room). However, very close on the heels of the “great room,” low-E windows came in as the second most likely feature of the 2015 home, trumping even heavy-duty insulation and buzz-worthy items such as tankless water heaters, Energy Star ratings and solar energy systems.

The Remodeling Sector
Remodeling contractors are detecting a stronger pulse in their markets, but homeowners are less likely to ask for deluxe makeovers, instead favoring features that will lower operating costs.

During the 2005-2006 boom, people focused on major, upper-end kitchen and bath remodels and room additions. Along came the crash. The focus shifted to whatever needed to be done, such as critical repairs, replacing heating and cooling systems or improving curb appeal to attract the increasingly rare buyer–while taking advantage of tax credits for energy efficiency upgrades.

While most experts do not envision a return to boom-level spending, forces are at work that point to better times for remodeling. The aging of the housing stock and the work needed for it to remain economically livable is a factor, along with people's reduced mobility stemming from the inability to sell their homes. According to the American Express Spending and Saving Tracker, an annual poll of homeowners revealed that 64 percent plan to invest in home improvement projects in 2011, with 31 percent specifically looking at energy saving improvements. Of all energy efficiency improvement options, upgrading to high-performance windows and doors topped the list.

Before risking the expense of flashy “dream house” improvements, consumers are thinking of new and better windows or doors. Most appear to understand that upgrading to energy efficient windows is the most cost-effective way to improve home energy efficiency. The options that are going to save the most money over time, and the payback period for upgrades and replacements, are in the forefront of their more practical, less indulgent thinking–perhaps a serendipitous byproduct of the Great Recession.

One of the perennial favorites for new home upgrades and remodeling–the showpiece kitchen–appears to be an endangered species. According to the NAHB survey–at least for now–upscale granite countertops, hot water dispensers, butler’s pantries, wine coolers and trash compactors may soon be rare. But high-efficiency windows are gaining traction and wide spread recognition through the stimulating 2010 tax credits and as the market gradually phases out outdated features in order to integrate features that are more practical and will ultimately save money on energy bills.

Rich Walker is president and CEO of the American Architectural Manufacturers Association, 847/303-5664,