Home Trends & Buyer Preferences JANUARY 23, 2013 // 8:30 - - PowerPoint PPT Presentation

Home Trends & Buyer Preferences

JANUARY 23, 2013 // 8:30 – 10:00 AM]

Presenter(s):

Rose Quint // NAHB, Washington, DC

Home Trends & Buyer Preferences

Based on the results of new surveys by NAHB and Better Homes and Gardens, this session will describe the latest home buyer preferences for the design, features and technologies of new homes. You'll learn valuable insights about the shape of new home demand, and also get useful leads on the features and amenities that will deliver the best possible housing products moving forward.

Learning Outcomes

• Identify the top ten features most wanted by home buyers
• Identify the characteristics that most influence the home purchase

decision

• Understand how potential home buyers trade off the size of new

homes with the combination of high-quality products and amenities

NAHB

• Changes in Population and Households
• Characteristics of New Homes Built in 2012
• What Home Buyers Really Want

Changes in Population and Households

0% 20% 40% 60% 80% 100% 1970 1980 1990 2000 08 09 10 11 12 Other Families Unrelated Adults Married Couple Families Living Alone

Source: U.S. Census Bureau, Current Population Survey.

(As % of Households)

Households (HH) by Type

• Married couples‟

% continues to fall: 71% in 1970 49% in 2012

• While other HH types

gain share – Living alone: 17% in 1970 27% in 2012

0% 20% 40% 60% 80% 100% 120% 2000 02 04 06 08 10 12 Asian Hispanic* White Black

* Hispanics can be of any race. Source: U.S. Census Bureau, Current Population Survey.

(As % of Households)

Households by Race/Ethnicity

• In 2012:

80% White 13% Black 4% Asian 12% Hispanic

• In 2000:

84% White 12% Black 3% Asian 9% Hispanic

Source: U.S. Census Bureau, Current Population Survey.

(As % of Households)

Households by Tenure

• Owner share has

fallen: 69% in 2005 65% in 2012

• While Renter share

has increased: 31% in 2005 35% in 2012

25% 27% 29% 31% 33% 35% 37% 39% 41% 60% 61% 62% 63% 64% 65% 66% 67% 68% 69% 70%

2000 2002 2004 2006 2008 2010 2012 Renters (Right Axis) Owners (Left axis)

0% 5% 10% 15% 20% 25% 30% 35%

70 80 90 00 01 02 03 04 05 06 07 08 09 10 11 12

Male Female

Source: U.S. Census Bureau, Current Population Survey.

Householders by Gender

(As a % of Households)

• In 2012:

Women headed 30% of HH Men headed 21% (Married couples 49%)

• In 1970:

Women headed 21% of HH Men headed 8% (Married couples 71%)

20% 22% 24% 26% 28% 30% 32% 34% 36%

70 80 90 00 01 02 03 04 05 06 07 08 09 10 11 12

Male Female Overall

Source: U.S. Census Bureau, Current Population Survey.

“Never Married” Share of Population

(Percent of people 15 or older)

• Share of Population > 15

who have never married in 2012: Male: 34% Female: 28% Overall: 31%

• In 1970:

Male: 28% Female: 22% Overall: 25%

5% 7% 9% 11% 13% 15% 17% 19% 1 2 3 4

00 01 02 03 04 05 06 07 08 09 10 11 12

Millions Male (left axis) Female (left axis) Share of Age Group

Source: U.S. Census Bureau, Current Population Survey.

Adults 25-34 Living with Parent(s)

• In 2012:

Male: 3.5 million Female: 2.2 million

• In all, 14% of age group
• In 2000:

Male: 2.4 million Female: 1.6 million

• In all, 11% of age group

Source: U.S. Census Bureau, Decennial Census.

3.9 5.1 2000 2010

Multigenerational Households

(In Millions)

• Yes, there was a 30% increase

between 2000 and 2010, but still a small share of total households – about 4%.

• Three types of MG households:

66%: Householder + child + grandchild

33%: Householder + parent + child 1%: Householder + parent + child +grandchild

Characteristics of New Homes Built in 2012

1,500 1,700 1,900 2,100 2,300 2,500 2,700

2000 01 02 03 04 05 06 07 08 09 10 11 12

2,524 2,362 2,499

Note: Data for 2012 includes only first half of the year. Source: U.S. Census Bureau.

Average Size of New Single-Family Homes Started

(Square Feet)

• Average home size

continues to rise –up to 2,524 sq. ft. in 2012.

5 10 15 20 25 30 35 40 45

2000 01 02 03 04 05 06 07 08 09 10 11 12

42% 34% 39%

* Data for 2012 includes only first half of the year. Source: U.S. Census Bureau.

(% of single-family homes started)

Homes with 4+ Bedrooms

• Share with 4+

bedrooms continues to grow.

• From 34% in „09, to:

36% in „10 40% in „1 1 42% in „12

5 10 15 20 25 30 35

2000 01 02 03 04 05 06 07 08 09 10 11 12

29% 27% 23%

* Data for 2012 includes only first half of the year. Source: U.S. Census Bureau.

Homes with 3+ Full Bathrooms

• Share of new homes

started with 3+ full baths has increased 2 years in a row.

• From 23% in „10, to:

28% in „1 1 29% in „12

(% of single-family homes started)

5 10 15 20 25 30

2000 01 02 03 04 05 06 07 08 09 10 11 12

19% 20% 16%

* Data for 2012 includes only first half of the year. Source: U.S. Census Bureau.

Homes with 3+ Car Garage

• Share with 3+ car

garage also continues to increase.

• From 16% in „10, to:

18% in „1 1 19% in „12

(% of single-family homes started)

10 20 30 40 50 60 70

2000 01 02 03 04 05 06 07 08 09 10 11 12

57% 57% 51%

* Data for 2012 includes only first half of the year. Source: U.S. Census Bureau.

Homes with 2-Stories

• Share with 2-Stories

keeps rising as well.

• From 51% in „09, to:

53% in „10 54% in „1 1 57% in „12

(% of single-family homes started)

$305 $248 $279 $0 $50 $100 $150 $200 $250 $300 $350

2000 01 02 03 04 05 06 07 08 09 10 11 12

* Data for 2012 includes only first half of the year.

Source: U.S. Census Bureau.

Average Sales Price of Homes Started For-Sale

• And the average sales

price (of homes started for sale) rose to $279,000 in 2012.

• That is three years of

consecutive increases, since bottoming at $248,000 in 2009.

(% of single-family homes started)

• More likely to have 4+ bedrooms
• More likely to have 3+ full bathrooms
• More likely to have a 3+ car garage
• More likely to be 2-Stories
• On average, more square footage
• On average, more expensive

Homes Started in 2012 were once again . . .

} WHY?

• Mortgage lending remains difficult for buyers without:
• 20% down payment
• Excellent credit score
• Verifiable employment & income
• As a result, many (less financially solid) buyers remain

shut out of the new home market.

• And so characteristics of homes started in 2012 reflect

preferences of those who could access credit, i.e., wealthier, better-off buyers.

Why Did Homes Get Bigger in 2012?

What Home Buyers Really Want

• Survey of 3,682 home buyers
• Conducted in Summer 2012
• Representative of all home buyers

Source: NAHB, 2012 What Home Buyers Really Want.

1,906 2,226

Currently Have Would Like to Have

Home Size

(Median Square Feet)

• Home buyers want a

median of 2,226 square feet in their next home.

• 17% larger than their

current home.

• But 13% smaller than

homes started in 2012.

Source: NAHB, 2012 What Home Buyers Really Want.

6% 7% 13% 74% Oversized kitchen and no family room Side-by-side, with full wall Completely separate areas of house Open, completely or with half wall

Most Want Kitchen Open to the Family Room

(% of Respondents)

• 37% prefer a completely
• pen arrangement, up from

29% in 2004.

• Preference for open

kitchen/FR increases as the price buyer expects to pay rises.

Source: NAHB, 2012 What Home Buyers Really Want.

0% 13% 47% 32% 8% One Two Three Four Five or more 79%

Most Buyers Want 3 or 4 Bedrooms

(% of Respondents)

• The presence of

children has big impact

• n this preference.
• 57% of married

couples with children want 4+ bedrooms.

• Compared to only

25% of those married without children.

Source: NAHB, 2012 What Home Buyers Really Want.

11% 35% 30% 13% 10% Up to 1½ 2 2½ 3 3½ or more

2 ½ Baths Are Enough for Most Buyers

(% of Respondents)

• Number of bathrooms

desired is positively related to household income.

• 3 ½ or more baths are

wanted by: 5% with inc. < $50k 26% with inc. $150k+

Source: NAHB, 2012 What Home Buyers Really Want.

65% 34% 9 Feet or more 8 Feet

Most Want Ceilings 9‟+ in First Floor

(% of Respondents)

• Preference for high

ceilings in 1st floor continues to increase: 54% in 2004 64% in 2007 65% in 2012

Source: NAHB, 2012 What Home Buyers Really Want.

33% 35% 39% 65% Proximity of the community to locations you want to go Better insulated and sealed home Energy efficient features Living Space and number

• f rooms to meet your

needs

Characteristics that Most Influence Home Purchase

(% of Respondents)

• For 65% of buyers,

appropriate living space ranks as the most influential characteristic.

• Energy efficiency and a

well-insulated home are next most influential.

• Followed by proximity to

desired locations (work, shopping).

Source: NAHB, 2012 What Home Buyers Really Want.

Willing to Buy a Home Without a Living Room?

(% of Respondents) Yes, 37% No, 41% Not sure, 21%

• Still, no majority
• pinion on the living

room.

• 1 out of 5 can be

persuaded either way.

• Willingness to buy

without a LR increases with household income.

Home Buyers Rated 120+ Features as:

• Essential/Must have – unlikely

to buy a home without feature

• Do not want – not likely to

buy a home with this feature

• Desirable – seriously influenced

to buy home if feature is included

• Indifferent – would not influence

purchase decision

Source: NAHB, 2012 What Home Buyers Really Want.

The Most Wanted List

(% of Respondents) 36% 57% 28% 53% 41% 39% 35% 48% 32% 36% 31% 58% 36% 63% 37% 49% 51% 54% 40% 54% 49% 54% Energy-Star rated appliances Laundry room Energy-Star rating for whole home Exhaust fan in bathroom Exterior lighting Bathroom linen closet Energy-Star rated windows Ceiling fan Garage storage Table space for eating in kitchen Walk-in kitchen pantry Essential/Must Have Desirable

94% 93% 91% 90% 90% 90% 89% 88% 86% 85% 85%

Source: NAHB, 2012 What Home Buyers Really Want.

Most Popular Kitchen Features

(% of Respondents) 36% 31% 44% 23% 25% 22% 20% 17% 22% 19% 12% 9% 9% 11% 49% 54% 40% 57% 53% 54% 51% 53% 47% 46% 50% 47% 47% 41% Table space for eating Walk-in pantry Double sink Pull-out shelves Wood cabinets Central island Granite/Natural stone countertop Recessed lighting Drinking water filtration Desk/Computer area Solid surface countertop (Corian) Breakfast bar Special use storage Instant hot water dispenser Essential/Must Have Desirable

85% 85% 84% 80% 78% 76% 71% 70% 69% 65% 62% 56% 56% 52%

Source: NAHB, 2012 What Home Buyers Really Want.

Most Popular Bathroom Features

(% of Respondents) 53% 39% 41% 28% 18% 16% 18% 17% 11% 11% 37% 51% 41% 46% 47% 45% 41% 41% 45% 44% Exhaust fan Linen closet Both shower stall & tub in master bath Double vanity Ceramic tile walls Whirlpool tub in master bath Private toilet compartment Toilet, tub and sink (white) Granite vanity Multiple shower heads in master bath Essential/Must Have Desirable

90% 90% 82% 74% 65% 61% 59% 58% 56% 55%

Source: NAHB, 2012 What Home Buyers Really Want.

Most Popular Outdoor Features

(% of Respondents) 41% 27% 26% 29% 22% 21% 17% 21% 49% 56% 54% 49% 55% 51% 45% 39% Exterior lighting Patio Front porch Lot with trees Deck Rear porch Outdoor grill Lawn sprinklers Essential/Must Have Desirable

90% 83% 80% 78% 77% 72% 62% 60%

Source: NAHB, 2012 What Home Buyers Really Want.

How Home Buyers Prefer to Pay for Amenities

(% of Respondents) Prefer all amenities included in base price, 50% Prefer basic home with amenities

• ffered as
• ptions,

50%

• In 2007, 36%

wanted basic home with options.

• Preference for all

amenities to be included in base price varies across expected price points: 43% w/ price <$150k to 65% w/ price $500k+

Source: NAHB, 2012 What Home Buyers Really Want.

30% 30% 31% 32% 34% 37% 37% 39% 39% 40% 47% 50% 3% 5% 8% 4% 7% 11% 19% 5% 7% 7% 50% 15% Whole house control system Smart irrigation system Outdoor speakers & audio controls Energy management system/display Central vacuum system Multi-zone HVAC system Home Theatre Wireless home audio system Lighting control system Security cameras Programmable thermostat Wireless home security system Currently Have Would Like to Have

Technology Features: Current & Wanted

(% of Respondents)

• 12 (of 26 listed)

technology features are wanted by 30%

• r more of buyers.
• In general, few

have them, but many want them, i.e.,

• A wireless home

security system is wanted by 50% of buyers, but only 15% have it now.

Source: NAHB, 2012 What Home Buyers Really Want.

12% 22% 24% 34% 37% 38% 48% Less expensive material Fewer amenities Longer commute to work Smaller lot Smaller house Farther away from shopping, entertainment, etc Unfinished spaces

What Buyers Would Accept to Make Home Affordable

(% of Respondents)

• Question reveals what‟s

really important to buyers when confronting a home purchase with limited resources.

• Almost half are willing to

allow some spaces to remain unfinished.

• Few are wiling to

compromise on materials.

Source: NAHB, 2012 What Home Buyers Really Want.

30% 70% Two full master bedroom suites, plus 1 standard room One full master bedroom suite, plus 3 standard bedrooms

Trade-Offs (% of Respondents)

38% 62% Bigger house with fewer amenities Smaller house w/ high quality products & amenities 38% 62% Distinct and separate dining and living rooms An open living room/dining room 11% 89% A home without energy efficiency features that costs 2- 3% less A highly energy efficient home w/ lower utility bills

• ver home's life

Source: NAHB, 2012 What Home Buyers Really Want.

14% 67% 18% Concerned, and WOULD pay more Concerned/want environment- friendly home, but WOULD NOT pay more Not concerned

Concerned About Impact of Home on Environment ?

(% of Respondents)

• Home buyers have

similar attitudes about the environment irrespective of their age, geography, or race.

Source: NAHB, 2012 What Home Buyers Really Want.

34% 39% 22% 4% 1% Strongly Agree Agree Neutral Disagree Strongly Disagree

Most Buyers Agree Utility Costs Influence Home Purchase

(% of Respondents)

• However, buyers are

quite concerned about utility costs.

• 73% agree projected

utility costs would influence purchase decision.

73%

Source: NAHB, 2012 What Home Buyers Really Want.

10% 20% 30% 40% $15,000 or more $10,000 to $14,999 $5,000 to $9,999 Less than $5,000

Additional Amount Buyers Are Willing to Pay for Home to Save $1,000/year in utilities

(% of Respondents)

• So how much extra will

buyers pay up-front to save

• n utility bills?
• On average, $7,095 to

save $1,000 a year in utility costs.

• This translates into a

14% rate of return on the upfront investment. Average: $7,095

Source: NAHB, 2012 What Home Buyers Really Want.

Community Amenities that Seriously Influence Buyers

(% of Respondents)

• First 3 features

seriously influence 50%

• r more of all buyers.
• Closely behind is a

lake, important to 45%.

• Another 5 seriously

influence 30%-39% of buyers.

31% 32% 35% 37% 39% 45% 50% 54% 60% Playgrounds Drug Store Convenience Store Outdoor maintenance service Exercise room Lake Outdoor swimming pool Park area Walking/jogging trails

Source: NAHB, 2012 What Home Buyers Really Want.

Most “Unwanted” List

(% of Respondents Rating “Do Not Want”) 30% 31% 31% 31% 31% 32% 38% 40% 41% 42% 43% 44% 48% 51% 56% 66% 70% Ceramic tile countertop Glass front cabinets His & Her baths Game room Outdoor kitchen Laundry chute Two story entry foyer Laminate countertop Wet bar Wine cooler Two story family room Mixed use community Gated community Only a shower stall in master bath High density community Golf course community Elevator

What Home Buyers Really Want

Provides insight into buyers’ preferences and the trade-offs they are willing to make

• Available as an e-Book only
• Download to your PC, iPad, or view and

read online

• Fully searchable

Visit ebooks.builderbooks.com

Speaker Contacts:

Jill Waage Better Homes & Gardens 1716 Locust St Des Moines, IA 50309 515-284-3756 Jill.Waage@meredith.com Rose Quint NAHB 1201 15th Street NW Washington, DC 20005 202-266-8527 rquint@nahb.org Stephen Melman NAHB 1201 15th Street NW Washington, DC 20005 202-266-8245 smelman@nahb.org

IBS Education National Association of Home Builders 1201 15th Street | Washington, DC 20005 800-368-5242 | ibsedu@nahb.org