New construction has picked up in 2012 and continues to trend upward. There is no longer a glut of homes on the markets and average prices have increased over two consecutive years. These are definite signs that the housing market is in a recovery.
There are several consumer trends that are worth noting. New homes are much smaller than they were 5-8 years ago. Large multi-family housing (apartments and condos) have increased significantly. Multi-family housing starts have increased by 60% in 2011 and 30% in 2012 after taking a monstrous dip in 2009. Below is what we believe are the basic causes of these trends.
Smaller Home Construction:
- The first home buyers entering the market have smaller families and don?t need the space.
- The market crash of 2006 has tightened up credit and made buyers more wary of making larger investments, so the consumer is making safer buying decisions. It appears that the vision of a dream home estate located somewhere out in the suburbs on a multi acre land has been replaced by more practical ideals.
- More home buyers are going back to the city to be closer to work and reduce commute time and gas expenditures. Old homes in urban areas are being razed and replaced with new construction on lots typically smaller than what suburbs would allow.
- Seniors approaching retirement are downsizing and buying smaller homes to accommodate their retirement lifestyle.
Multi-family Housing Units:
- The housing bust of 2006 has made many potential new home buyers wary of making an investment in housing, so many are choosing to rent or lease rather than outright own.
- The aging baby boomers want to spend minimal time on home and yard maintenance and are choosing condos and townhomes for their golden years.
- Those who have lost their home due to foreclosure are probably forced to rent as they are having difficulty getting mortgage loans.
One trend that is evident with both single family construction and multi-family construction is that while space demands have diminished, consumers are demanding a higher level of amenities, quality and aesthetics than before. As a result products such as faux stone are being specified by builders because it enhances the perceived quality and elegance of the home. Trilite Stone is seeing its product in higher demand, especially in the multi-family homes.
Source: http://trilitestone.com/blog/home-construction-continues-increases-consumer-preferences-changing/
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