After a period of slow recovery, first-time buyers finally began making moves last year – setting the stage for an even more active 2017 as anticipated interest rate increases and steady job creation continue to fuel demand. How will the election impact the housing market, and what trends will shape home construction and design in 2017? Leading residential real estate experts recently offered their predictions for the year ahead.
1) Market Insight
“The dust has settled, so to speak, and people are ready to move on – and move in,” said Steve Baird, CEO and president of Baird & Warner, Chicago’s largest locally owned independent residential real estate services company. “We saw an immediate increase in activity after the election, and that’s a reflection of consumer confidence.”
The Federal Reserve’s decision to raise interest rates in December for just the second time in a decade is another positive sign. While home buyers can expect the same minimum requirements when applying for a mortgage, new technologies will make the process easier.
“Rates will be a little higher for home buyers, but the economy is also stronger,” said Craig Achtzehn, vice president of residential lending for Chicago-based Draper and Kramer Mortgage Corp. “We’re also already seeing the pendulum swing back the other direction on approvals, with government agencies and mortgage insurance companies allowing higher loan-to-value ratios, which is good news for buyers.”
2) Island Fever
Islands are becoming not just more flexible and spacious in 2017 but are also a destination within the home. According to Glenview, Ill.-based Edward R. James Cos., while the kitchen is the main topic of discussion with home buyers, it’s the island that gets the most attention.
“A standard-size island is not enough for most of today’s new-home buyers; they want it to accommodate multiple serving locations and plenty of seating,” said Jennifar Evans, director of design at the company. “And size matters, as many home buyers want an island that is at least eight feet long and five feet wide, which we joke is more like a continent than an island.”
But kitchen islands aren’t only changing in size – they’re also changing in configuration. Elissa Morgante, co-principal of Evanston, Ill.-based Morgante Wilson Architects, says “spectator” kitchen islands, with the range as the focal point, are growing in popularity among serious at-home chefs.
“People who love to cook want to put as much emphasis on the preparation of the meal as they do the enjoyment of the end result,” she said. “Putting the range in the island, with seating all around it and great lighting and ventilation overhead, makes cooking an event – whether they’re entertaining guests or simply making dinner for their family.”
3) Sliding Options
Interior sliding doors – from space-saving pocket doors to barn doors and wall partitions – are becoming a must-have feature in 2017, whether they’re in a single-family home, apartment or condominium.
“Barn doors are more popular than ever because they’re such a great complement to the open floor plans almost all homeowners want today,” said Morgante. “We use them to give our clients the flexibility to open up large swaths of space between rooms for even better flow in the home or to create privacy for certain areas when they want it, such as an intimate dining room, quiet library or home office.”
Home builders, too, are discovering the appeal of sliding doors. Evans notes an uptick in buyers choosing pocket door options at the builder’s Anets Woods community in Northbrook, Ill.
“Pocket doors are a great choice in places where buyers don’t want traditional swing doors that can interrupt traffic flow or sight lines,” said Evans. “They’re ideal in highly used yet often compact spaces such as hallways.”
And at Heritage Harbor Ottawa Resort, a vacation home community in Ottawa, Ill., barn and pocket doors are an ideal fit for vacation properties inspired by seaside cottage living.
“Many of our homes are intentionally designed to be smaller and easier to maintain, and these types of doors allow us to pack more function into less space,” said Tammy Barry, director of sales and marketing.
4) Outdoor Spaces In Demand
Whether they’re in a high-rise residential tower or single-family home, outdoor living spaces have emerged as one of the most coveted features for buyers and renters, especially in cities where green spaces are few and far between.
“Typically, row homes in the city may have one or two private outdoor spaces, but to have all three is practically unheard of,” said Jeff Benach, principal of Chicago-based Lexington Homes. “Outdoor spaces such as decks, balconies and patios are at the top of most buyers’ wish lists because they offer additional living space that can be easily adapted for multiple uses. They also add long-term value to the home because they’re something that never goes out of style.”
The shift in focus to the outdoors reflects what’s happening indoors, too, according to Morgante. “Many of our recent renovation projects have involved shifting walls and even moving elements like fireplaces so that sight lines to the outdoors are preserved and highlighted, while many of our new-construction projects feature huge expanses of glass overlooking rear yards and gardens,” she said. “We also love giving clients flexibility in their spaces, such as a porch with retractable floor-to-ceiling screens that can be opened up when weather permits.”
Original publication: Trends Shaping the Residential Market