Build it and they will come. Or will they? Home buyer preferences and expectations are always in flux.
CALpix
Members of Generation Z, the 18- to 24-year-olds now aging into home shopping, prefer diverse neighborhoods to homogeneous ones. Baby boomers value wellness and want home proximity to healthcare. Millennials would rather own a vacation home and rent their primary residence, but either way seek properties with a decent back yard. And super seniors, the elder-most cohort, are trying to stay in the homes they’ve paid off, or if they must, move in with a family member.
While these diverse preferences and market behaviors give builders of new homes a reason to think differently about their housing options, there could be a gap between home consumers of today and suitable options.
“We’re still building yesterday’s ‘dream home,’’’ said Tim Costello, president and CEO of Builders Digital Experience, the parent company of NewHomeSource.com, as part of an industry panel at the National Association of Real Estate Editors annual conference, held in Austin this week.
“World War II happened. Levittown happened. We’ve been following that (housing approach) for 70 years,” he said. Yesterday’s prevailing three-bedroom two-bath home now has four bedrooms and three baths, but it’s basically the same; but consumer needs have changed.
Costello noted how nuclear families today account for just 20% of homebuyers; surpassed by singles at 28%; couples without children at 25%; multiple adult cohabitants (such as multi-generation households, whether that means young adults with their parents or the latter and their parents), at 20%; and single-parent families, 7%.
The homebuying process, meanwhile, has also moved on, affected by 24/7 access to information online, demand for transparency throughout the buying process and an increasing number of ways to purchase a home.
As Realtor.com’s user experience research manager, panelist Jennifer Ding has tracked preferences by region, location, generation and gender. Among the findings, air conditioning is a top must have pretty much regardless, though its rank varies with regional climate.
A decent yard remains a prime preference for millennial homebuyers, she said, as are properties within a good school district, something most highly ranked by 21 percent of buyers in that cohort as they enter “family mode.” That said, however, being able to lock-and-leave is also paramount, something shared with the baby boomer respondents.
Meanwhile, a Homes.com poll found cross-cultural enrichment an emerging dynamic for Gen Z, with 58 percent of future homebuyers preferring a diverse community. Proximity to work, at 71%, and to friends and family, at 52%, ranked higher than urban location, 25%.
The housing hierarchy
Costello offered a housing version of Maslov’s index of needs. First, is it affordable for each of the consumer cohorts? Does its floorplan work for the lifestyle of its intended buyer? Are the style and finishes relevant to preferences?
And, is there an element that “delights?” On that, he referenced the Kano Model of product development, a combination of elements that satisfy (or not) and deliver a surprise, or delight; it’s something not expected – and something data filters catch, but it’s also charmingly memorable. His real estate example was an outdoor shower, which any dog owner might see for its actual purpose: a pet spa.
While a delight might make a property stand out, he said it doesn’t negate an otherwise subpar one.
Lose the granny-style grab bars
As the panel discussion turned to renovations prior to sale, panelist Dan DiClerico, Home Advisor’s smart home strategist, said there’s a year-to-year “horse race” on which room’s renovation is more prevalent, kitchen or bath. Both require investment — without overinvesting. A modest makeover can bring a 3% to 5% return on the total price at time of resale.
Realtor.com’s Ding said that since consumers find it’s easier to remodel bathrooms down the line, kitchen updates (done well) resonate with 11% percent of buyers.
Compared to, say, 15 years ago, today’s lifestyle is “solidly in an era of low maintenance,” DiClerico said. That plays out in the increasing use of quartz countertops instead of stone needing annual sealant, and in cabinet finishes (i.e. color) that hides heavy use. Meanwhile, the long stretch of stainless steel appliances is going darker with millennial buyers, who prefer black stainless finishes.
Prepping a home for resale means dealing with the deferred repairs — and keeping up the landscaping, he noted. “Give it a shave and a haircut.”