Positive Notes in Custom Recovery

By Shelley D. Hutchins

According to Kermit Baker, the American Institute of Architects' (AIA) chief economist, it's unusual for the custom residential market to recover faster than other types of housing. However, the AIA's 2011 first-quarter Home Design Trends Survey suggests just that. The quarterly survey asks detailed questions to the same group of residential architects—working in various densities and environments around the country—to achieve accurate and consistent results. "Although still declining, new construction segments show custom and luxury markets having greater stability and demonstrating better numbers than other segments like entry-level," Baker says.

Not only is the demand for custom homes stabilizing, Baker adds, but the square footage of those homes and their lot sizes also seem to have reached the nadir of a six-year downward curve. Survey respondents have reported declines in home sizes since the first quarter of 2005. That trend is changing with a rise in the number of respondents who are seeing floor plan sizes increase. In fact, 60 percent of residential architects questioned replied that upper-end home sizes are either increasing or remaining stable. Lot sizes still show slight reduction, but land prices have dropped enough that this trend might turn around in the near future. Only 22 percent indicated lot sizes were decreasing, down from the 37 percent in 2007.

Baker says whole-house renovations and large additions, kitchen and bath remodels, outdoor living, custom design details, and green enhancements all demonstrate stability or moderate growth. Whole-house remodeling projects are equal in growth to kitchen and bath projects, and client requests for custom details continue to include subtly integrated accessibility in the home, more flexible spaces, and informal open areas. Green enhancements such as nontoxic finishes, improved indoor air quality, and low-maintenance, durable materials remain popular, and Baker adds that demand for energy-efficiency upgrades continues to grow.

Outdoor living also shows positive activity. The number of firms reporting more projects with outdoor rooms climbed to 60 percent. Baker explains that outdoor living translates as architectural spaces rather than landscaping, but viewed separately, landscape design shows improvement as well. "While scaling back on home spending, households continue to make substantial investments in their properties," the report states.

Despite the continued albeit slowing decline in new construction sectors, residential architects are reporting upward swings in both project backlogs and billings. Baker hopes the new construction stall will turn around since home building is already stabilizing in parts of the country. First quarter billings from residential architects in the South and Midwest show consistent growth over the past year, while those in the West and Northeast trail by just a few points. Survey participants, as well as Baker, seem optimistic about a possibly long but definite custom housing recovery.

URL to original article: http://customhomeonline.com/industry-news.asp?sectionID=204&articleID=1608498&cid=NWBD110801002

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