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Recent data released by the U.S Census Bureau found that sales of new build homes fell 19.4% between June 2019 to June 2020 and June 2020 to June 2021.
Although much of these drops in buying figures can be attributed to increasing costs of building materials (particularly lumber) and labor pushing up the cost of new-build homes, residential construction professionals must look at the factors that they can control when it comes to fighting against this slump in new home sales.
One of these factors that homebuilders have under their direct control is creating homes that accommodate exactly what buyers are looking for in 2022. One of the advantages of newly built homes is that they can be created with people’s current needs in mind, and residential construction companies should try to take advantage of this as much as possible.
In this article, we will discuss what buyers currently want in their homes and how homebuilders can accommodate these suggestions in their construction plans.
Space to Work from home
Even though the enforced remote working has ended, the majority of the workforce still want to spend at least two days a week working from home. This has led to a decline in the demand for more open-plan homes, and an increase in demand for homes with smaller rooms so residents can have separate physical spaces for home and work life.
In particular, demand has grown for houses with one or two smaller “box” rooms that can be easily converted into office space.
Ideally, these rooms should have east-facing windows to let in light in the morning (as people will spend the majority of their time in there between 8 AM and 4 PM) and enough power outlets to run multiple devices simultaneously. Having this room be away from larger living spaces is also a bonus as it ensures that the room(s) will remain quiet during the day.
The obvious question this raises is how do we add these extra rooms without simply making houses larger and thereby more expensive?
The answer here is to sacrifice general living space. Bank of America’s 2021 Homebuyer Insights report found that over half of younger buyers say the community around them is the most important factor in what they want in a home.
This indicates that, perhaps as a response to using their home as a workplace, people are going to be wanting to socialize outside of their house more in the coming years. Larger communal living areas are therefore being seen as less important than having private, personal space.
Inexpensive to Maintain
A study by Bankrate found that 21% of millennial homebuyers “significantly underestimated” the costs associated with maintaining their home, with many respondents claiming that they would have thought twice about their purchase had they realized how expensive maintenance costs would have been.
Buyers, therefore, want homes that are both built to last, and which are energy efficient. You should be looking to build homes with a Home Energy Score of over six as this can be used as a key benefit when marketing a property.
Homes that are smaller in size, but that are built with better quality, durable and insulating materials can also be marketed as being specifically designed to be inexpensive to maintain. This can be used as a way to attract first-time buyers who have traditionally shied away from newly built homes.
Smart Features - but not just for their own sake
It’s lazy to assume that younger people want their homes to be equipped with every piece of smart technology available. While it’s true that certain gadgets do make a home more desirable (particularly to millennials), a lot of smart technologies simply add to the cost of a home without adding any real value to it.
There are, however, a handful of features homebuyers are currently looking for in properties. These are:
- EV charging: In 2020, nearly 1.8 million electric vehicles were registered in the USA. This trend is growing, especially among younger people. Having the facilities to charge an electric vehicle is now a must for many homebuyers and is expected to become the norm in the coming five years.
- Smart security systems: The smart home security systems market is expected to grow 7% year on year between 2021 and 2026. This is a testament to how seriously people take the role technology plays in their personal security. Having such a system in a home is particularly important if the building in question is in a location that is known for high levels of crime.
- Smart heating systems: This goes back to people’s desire to reduce the amount of money that they spend on heating and maintaining their homes. Smart heating systems, that allow you to control your heating from your phone, can go some way to achieving this goal and therefore making a home more appealing to buyers.
You should keep in mind that having all the smart features available for a home will push up the cost of both buying and running a home. Given the current demand for more affordable housing, homebuilders need to be very careful to not add smart features just for the sake of it.
Location with a Community
The overwhelming finding of the Bank of America’s 2021 Homebuyer’s Insight Report was that location is still the main factor that people look for when assessing whether to buy a home or not.
Several decades ago, homebuyers were most concerned with finding properties in locations that they felt were gentrifying so that they could maximize their profit when it came to selling up their home.
Now, as reported by 51% of under 30s and 31% of over 55s, homebuyers are looking for locations that have a strong sense of community and where neighbors feel connected to each other.
The consequence of this for residential construction companies is that more research is needed into the people in a particular location before any land is purchased.
You cannot just judge a sense of community by figures and metrics, rather you need to dig a little deeper and find out whether an area is really a welcoming place for someone to move to. This is the aspect of a home’s location that matters most to buyers, so it should also matter the most to construction companies.
Homebuilders must respond to the slump in new home sales by creating homes in accordance with the buyers' demands. In particular, additional attention should be paid to the location of a home and the community that it is embedded into, as well as building homes with enough rooms to facilitate hybrid working.