Attention, home builders: 2004 will be the year in which new-home buyers jump the generation gap from Baby Boomers to Generation X, according to Steve Bottfeld, EVP of Las Vegas-based consumer research firm Marketing Solutions.
“The evidence we have locally is that we’re going to continue to see growth of Gen X buyers in the new-home business, and that will begin to impact what types of homes are being built,” he said.
The generation jump is one trend expected to be in evidence at the 2004 International Builders Show, which opens today in Las Vegas. The show is an extravaganza of building techniques, products and trends.
Gen X buyers bring other popular trends with them. Bottfeld mentioned home entertainment centers, increased connectivity and replacing backyards with enclosed courtyards in the front of the house as examples. He also identified the emergence of “great rooms,” which are taking the place of traditional living rooms, as a Gen X preference.
Bottfeld said the living traditional room is a home builder’s “dodo bird” that’s becoming smaller in size and nearly extinct in some new-home markets. The emerging great room is one large room that enables homeowners to set up the space however they choose.
As living rooms shrink, kitchens are becoming larger as more women are designing them. Bottfeld predicted island kitchens will continue to increase along with the population of female designers.
“Kitchens and master bedrooms are what sell the house,” he said. “And trust me, women are the home buyers.”
Another home-building trend is higher density developments. The urban village concept will be become more popular as builders face stricter land-use controls and urban cores simply run out of space.
Bottfeld pointed to Summerlin, a master-planned community just outside Las Vegas, as an example of the mixed-use urban village concept. Summerlin encompasses 22,500 acres of land and houses about 30,000 residents. The community boasts mixed-income housing, large areas preserved for open space, environmental protection measures such as new habitats created for bird life, and public transit access points. The master-planned community has about 16,000 jobs.
A trend known as “green building” also has started catching on with builders. The phrase describes building techniques that are environmentally friendly. Examples include incorporating solar power into a home, water-saving technology and energy-saving appliances.
Not all builders are convinced that green building has caught on with buyers. Randy Lee, a builder and developer in New York, believes the costs of green building and implementing the technology associated with environmentally friendly home designs isn’t affordable enough to sway most buyers. Adoption of the products is still low, which causes the costs to be too high.
“It would be the rare person who would pay $10,000 more for a house because it is ‘green,'” he said.
Lee, CEO of Leewood Real Estate Group, believes green building will catch on slowly, but at some point as the market expands the techniques will gain adoption.
Lee thinks the biggest buzz at this week’s builders’ show will be the outlook for low mortgage interest rates. Record low rates over the last few years have helped fuel affordability for more middle- and lower-income home buyers.
“That’s the trend that’s really given home ownership a boost,” he said.
Low interest rates also helped jumpstart such emerging markets as immigrants and younger home buyers. Those groups are also shaping trends in new homes.
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