November 12, 2024

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Six Single-Family Trends That Will Take Off in 2021

Six Single-Family Trends That Will Take Off in 2021

Six Single-Family Trends That Will Take Off in 2021
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Home builders had already begun to pivot their focus heading into 2020. After years of catering to luxury and move-up buyers, many builders found the new religion of entry-level homes. The result was median new-home prices finally losing some of their air, flirting with $300,000 toward the end of 2019.

What a difference a year and a worldwide pandemic make. Instead of the smaller, more efficient homes that were ascendant just 12 months ago, today’s homes need form and function to serve the entire family. While more space, “Zoom rooms,” and outdoor access are a few of the headline impacts of 2020, builders also say there’s been a fundamental shift in what home means to American buyers.

“People are realizing more than ever the fragility and expiration of life,” says Scott Acton, CEO of Las Vegas–based Forté Specialty Contractors, which focuses on custom, luxury homes. “They’re steadfast and determined to turn their residential dreams into reality. We see them chasing a feeling, one that is good, safe, and permanent.”

Erik Heuser, EVP, chief corporate operations officer at Scottsdale, Arizona–based home builder Taylor Morrison, sees the impacts of 2020 lasting well into 2021, and beyond. “You’re looking at a greater range of virtual home-buying options, healthy home features and products, earthy color tones, a desire for organized and orderly home spaces, and a favorable single-family rental market,” he says.

Here are the trends and outlooks that are shaping the home building industry heading into 2021.

Drive Until You Find Your Happy Place

Perhaps one of the biggest shifts in home building for 2021 is where people are willing and now able to live today. With the pandemic accelerating and cementing work-from-home in a way that few anticipated, the old maxim of “drive until you qualify” is being seen in a new light, as more workers are increasingly able to live anywhere.

“People are moving out of the city to the suburbs where they can get more square footage and outdoor space,” says Marc Rousso, CEO of Seattle-based JayMarc Homes. “With so many people working from home, being close to employment centers is less important.”

That is true both for production builders, who are increasingly seeking tracts of land in tertiary markets, as well as custom builders, who are now seeing their customers’ aspirations limited only by their imaginations. “We have more clients who have decided to build in dream home locations where they’ve always wanted to live, but couldn’t commute from,” says Kim Hibbs, president of Hibbs Homes, which builds in St. Louis and Park City, Utah.

Build-to-Rent Getting Even Stronger

The flight from cities that has caused so many builders in secondary markets to boom in 2020 will continue, which has also spurred the rise of single-family build-to-rent homes. That was a strong trend before the pandemic struck, and today it’s even more pronounced.

Taylor Morrison partnered with Christopher Todd Communities in 2019 to create two build-to-rent communities in Phoenix. Now, that business line is being fast-tracked to meet the changing demands in the market.

“Additional Arizona communities are in the planning stages along with national expansion in Texas, North Carolina, and Florida,” Heuser says. “As consumer preferences shift away from dense traditional apartments to more spacious, single-story living, we look forward to leveraging our home building and land acquisition expertise in new ways with the build-to-rent market.”

Bigger Is Better, Again

While builders and buyers emphasized smaller, more functional homes heading into 2020, space is again one of the leading drivers of home design. The downsizing trend from the 2010s has now swung back as people spread out with their extended families under one roof.

“We are seeing more people wanting to move up, due to being at home and realizing what they dislike about their current home,” says John Judd Sr., co-owner of Asheville, North Carolina–based Judd Builders. “We’re seeing people move from bigger cities and wanting a larger home. Many of them are older millennials with children, and they have high-paying jobs where they can work remotely.”

Similarly, Jeff Benach, principal at Lexington Homes, says the firm has worked with many buyers to purchase homes in Chicago’s western suburbs. With most coming from a condo or apartment, the buyers were drawn to larger floor plans, home offices, and more green space.

At Taylor Morrison, which, like many firms, had deepened its focus on more entry-level homes going into 2020, buyers are back at the more intermediary and higher end of the market, as well.

“While the greatest percentage of home sales are at the modest price-point levels across the U.S., the higher price points have gained the most relative share of late,” says Heuser. “We, importantly, are able to serve a broad scope of price points across our business and footprint. I’d say the active adult buyer has also returned meaningfully, as well.”

What Buyers Want

The lockdowns of 2020 have made clear to home buyers the elements they want—and dislike—in their homes.

“Homeowners are looking for flex space that they can use as they see fit, either as an office or a place where they can home-school the kids,” says Alan Beulah, vice president of sales and marketing at the Charlotte, North Carolina, division of Columbus, Ohio–based M/I Homes.

While that doesn’t mean open floor plans will go away, it does mean buyers are looking beyond just a kitchen with a clear sightline into the living room. “The best designs are those that show how open floor plans and defined spaces can exist in the same home,” says Steve Spinell, principal at Chicago-based Kinzie Builders, who notes that in his firm’s townhomes, “the lower level includes a den, which works nicely as an option for more secluded space away from the open areas on the main living floor.”

For Jay Kallos, senior vice president of architecture at Alpharetta, Georgia–based production home builder Ashton Woods, it’s about being able to fill multiple needs under one roof. “More than ever, people are eating, relaxing, playing, working, and sleeping in their homes,” he says. “Plan flexibility and great design are key. If we can include rooms outside of the open floor plan space that meet three or four of those needs, we have done a great favor to the homeowner.”

Doing It Virtually

Several builders emphasized how 2020 changed the way homes are sold virtually, an impact they don’t see going away once the pandemic does.

“We rolled out more virtual home tours and sales appointments in 2020, and we anticipate continuing to offer them,” says Mark Carruth, CEO of Woodstock, Georgia–based Windsong Properties. “We used more electronic document signing tools, along with virtual meetings for out-of-state buyers and those who prefer to attend remotely.”

Keep It Healthy

The emphasis on wellness became more pronounced in 2020, and most builders see that as a way to help new homes compete with existing ones.

“More than one-third of potential buyers said they want a new home for better in-home health and wellness features,” Heuser says. “We believe these buyer habits are directly related to COVID-19 concerns.”

With buyers showing more interest in the health of their homes, builders are responding. For example, Taylor Morrison’s TM LiveWell standard offering includes better ventilation and filtering for indoor air quality, cleaner drinking water options and filters, and a focus on nontoxic, healthy building materials that contain fewer chemicals.