Buyers Preferences In Soft Housing Market

Even in the depths of the current cyclical housing downturn, consumers continue to be interested in housing and home builders can tap into that potential by paying careful attention to home buying preferences, according to two experts on market trends who presented their latest research findings at the International Builder's Show in Orlando last month.
Emerging as a strong draw for consumers this year is anything “green,” a market force that has been gaining strength with the continuing rise of energy costs, according to Gopal Ahluwalia, NAHB’s vice president of research.
“New home buyers are most influenced by greener choices that include energy-efficient features and equipment-based energy saving features,” said Ahluwalia. “They are also very interested in exterior features, such as a front porch, deck or patio in the rear, and exterior lighting. In addition, laundry rooms and dining rooms are widely considered to be essential in new homes.”
Gayle Butler, editor-in-chief of Better Homes and Gardens, confirmed that eco-friendly building is also very much on the radar of a growing number of consumers.
In a research study conducted by the magazine in January surveying more than 2,000 home enthusiasts from across the country who bought a new home in the past 10 years or plan to build one in the next 10 years, more than half of the respondents said they wanted green building and remodeling options presented to them. This number jumps to more than two out of three in the millennial age group.
Nineteen percent said that it is the responsibility of builders to use eco-friendly materials and build highly energy-efficient homes, even if it adds to the cost of the home, said Butler.
Thirty-one percent said their neighbors would buy a green home “when the cost of such homes are within 3% to 5% of conventional homes.”
Sparking Interest in a Down Market
When asked the best way for a builder to spark a buyer’s interest in today’s market, the Better Homes and Gardens survey found that 44% of the respondents prefer bonus home amenities and upgrades; 42% would like a discount on the price of a new home; 37% want the builder to buy their old home at a fair price; and 31% desire free professional decorating and landscaping advice.
“What we’ve discovered is that home continues to be our emotional center and the sweet spot of everyday life,” said Butler. “Economic uncertainty aside, we won’t stop spending, improving and dreaming when it comes to home.”
Better Homes and Gardens found that its readers prefer a home that accommodates modern lifestyles, has the flexibility to be adapted for future needs, is special “for me” and provides greener choices.
More specifically, 71% identified an all-new kitchen that looks great and is a fun place in which to work as an exciting feature to look for when shopping for a newly built home. Forty-three percent rated sufficient storage as a top priority and 41% cited a master suite “that feels like a luxurious hotel room.”
In the next five to 10 years, Butler reported, 50% of those under age 43 expect to need a home office that functions as a full-time work space, 30% of baby boomers expect an aging parent to move in and 66% of boomers expect to need guest accommodations for grown children and grandchildren.
Today’s home buyer prefers designs tailor-made for their specific needs. “Sixty-nine percent said no more cookie-cutter houses,” she said. “They want a house that has character and charm.”
Satisfaction With Kitchens and Baths
Although consumers generally prefer homes that are bigger and equipped with more amenities, said Ahluwalia, some features of new homes have now improved to the point where home buyers are relatively satisfied.
For example, while large kitchens are desirable, many consumers would be reluctant to see the kitchen expand further at the expense of other space, said Ahluwalia.
“Just over 37% of shoppers would sacrifice living space for a larger-than-average kitchen,” he said.
Home buyers are generally content with the number of bathrooms in typical new homes being built today, Ahluwalia said, and continuing a trend identified in earlier NAHB studies, more than one-third of home buyers do not think it is necessary to have a living room.
These conclusions come from a new NAHB survey of more than 2,300 recent and prospective home buyers that examined the features, amenities and layouts preferred in a new home.
Top-10 ‘Must-Have’ Features
Among the 10 features or designs most frequently rated as “essential/must have” before a consumer would consider buying a specific home, four were energy-related and two were exterior features.
A laundry room topped the list, rated essential by 55% of the survey respondents. Energy-related features in the top 10 included a high level of insulation (48%), exhaust fans (48%), Energy Star-rated windows (36%) and equipment-based energy saving measures (34%).
Exterior lighting (33%) and fenced yards (33%) were the two outdoor features that also made the top 10 list.
Of 21 different kitchen features, a walk-in pantry was rated as essential/must have or desirable by 86% of those surveyed, followed by an island work area (80%), built-in microwave (72%), drinking water filtration (69%) and special use storage (wine rack, spice drawer, pots and pans, cabinet, etc.) by 16%.
Granite/natural stone was the most popular kitchen counter material and a linen closet topped the list of bathroom features, with 89% of respondents categorizing it as essential/must have or desirable followed by an exhaust fan (88%), separate shower enclosure and water temperature control at 79% each.
The median home size of those surveyed was 1,835 square feet and the respondents said they wanted a median of 2,354 square feet in a new home. With the additional space, home shoppers expected to pay a median of $241,699, about 6% more than the $227,500 estimated median value of their current homes.
More than half (52%) of respondents prefer a master bedroom only on the second floor of a two-story home, while 16% prefer it on the first floor only and 22% would accept it on either floor.
More than two out of three respondents preferred nine-foot or higher ceilings on the first floor, and, continuing a popular trend of the last 20 years, more than 40% said they wanted the kitchen and family room to be adjacent and visually open, but with a half-wall separating the two rooms.
More than half of the respondents said they would like a minimum of four bedrooms, while 39% would accept three bedrooms.
Twenty-eight percent of those surveyed preferred at least three full bathrooms, one-third would like to have 2-1/2 bathrooms and 31% expressed satisfaction with only two bathrooms.
On the front exterior, brick was the most preferred, followed by stone, vinyl and stucco.

Remain positive even with the negative economic stories seen each night on the evening news. We live in Tulsa and still have a fantastic housing market and low mortgage rates. The above information is from the National Association of Home Builders and is very descriptive of present new housing trends. There are many great deals out there as new and existing homes continue to be listed.

For information about buying or selling a home please call Darryl Baskin or any member of his team of real estate specialists at 918.258.2600. For questions on mortgages, rates or expert advice on mortgage economics, please contact Jeff Sargent of ONB Bank & Trust Co at 918.481.6833. You can tune in to "The Future of Real Estate" show locally on KWHB TV Channel 47 (Cable 7) at 10 am Central Time each Saturday, Tulsa's Source for local real estate news and information.

Thank you and have a great week!
Jeff Sargent
President
ONB Bank & Trust Co/Residential Mortgage Division
8908 S Yale, Suite 250
Tulsa, OK 74137
Office: 918.392.6572
Cell: 918.636.0630
jeff_sargent@onbbank.com