Residential Architects See Slight Uptick in Business
Although business conditions for residential architects remain weak, they appear to be stabilizing, with findings of the American Institute of Architects (AIA) Home Design Trends Survey for this year’s first quarter showing the first uptick in billings since the second quarter of 2007.
“Business conditions at residential architecture firms really began to deteriorate in the middle of 2008,” said AIA Chief Economist Kermit Baker. “While still very weak, we are beginning to see a slight reversal in home design and improvement activity.”
On the AIA Home Design Survey Index, where any score above 50 is considered positive, architects’ billings registered 24 and inquiries for new projects were 35 during this year’s first three months.
The AIA survey is conducted quarterly with a panel of 500 architecture firms that concentrate their practice in the residential sector. The latest results of the survey were released on June 29.
The index ranks the health of specific residential segments by subtracting the percentage of respondents reporting weakening conditions from those who cite an improvement.
By that measure, kitchen and bath remodeling (28) was the strongest residential market segment in the first quarter, followed by additions and alterations (26).
In new construction, the first-time buyer/affordable home market showed the most activity, although it was rated a negative 27.
Faring worst in new construction was the second/vacation home market (-77), followed by custom/luxury homes (-52) and townhouses and condominiums (-51). The move-up home market scored -44.
The AIA survey found a continuation of the recent trend toward smaller homes resulting from the economic recession and a renewed interest among households in lowering utility costs. Only 4% of survey respondents reported seeing an increase in square footage in the first quarter, and architects are seeing a preference for lower ceilings and less interest in two-story foyers.
The survey found that property upgrades are extremely popular with households trying to maximize their usable space with finished attics and basements, outdoor living enhancements and blended indoor/outdoor features.
“The era of the ‘McMansion’ could well be over as home sizes have been trending downward recently, with a significantly higher number of architects reporting demand for smaller homes this year,” said Baker.
“And as the housing boom has passed,” he said, “there seems to be a renewed interest in investing in properties to make homes more livable, as opposed to real estate that can be resold quickly for a profit.”
Among outdoor living and landscaping trends, 67% of the survey respondents reported seeing an increase in low maintenance landscaping this year, followed by outdoor living space (60%), blended indoor/outdoor living (51%), exterior/security lighting (33%) and outdoor amenities (22%).
“Adding decks, porches and patios are all part of the outdoor living enhancement trend,” said Baker. “But that also extends to more formal outdoor ‘rooms,’ cooking areas and blended indoor/outdoor features.”
Tax Credit Web Site Looks at Opportunity of a Lifetime
Builders and other industry professionals can help spur home sales by referring prospective first-time home buyers to www.federalhousingtaxcredit.com. The NAHB Web site provides detailed information on the $8,000 federal tax credit for first-time home buyers included in the economic stimulus legislation signed into law by President Obama.
Consumers can use the Web site to find information on the tax credit — including a detailed question and answer section. It also includes information about other housing-related and small business measures in the legislation and a number of home-buying resources for consumers.
Spanish Version Also Available Online
A Spanish version of this increasingly popular Web site is also available to provide detailed information on the tax credit to Spanish-speaking first-time home buyers.
Industry professionals are encouraged to highlight either tax credit Web site when marketing to their potential first-time home buyer market.
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