Home offices, outdoor living spaces draw design interest

Homes are currently being designed with an eye toward affordability due to the decline in house prices in recent years in most areas of the country. Still, many households are willing to invest in home features, systems, and products that promote greater energy efficiency and accessibility throughout the home. Even with the general downsizing of homes, residential architects are reporting growing interest in outside living spaces, home offices, and mud rooms, according to the AIA’s Home Design Trends Survey for the second quarter of 2010. Almost 300 residential architects were surveyed on emerging design preferences of households.
Meanwhile, residential architecture firms reported a softening of business conditions at their firms during the second quarter, a trend that held for firms in every major region of the country. Project backlogs (the amount of design work currently in-house) remain very low. By construction sector, homes priced at the lower end of the price spectrum are doing somewhat better, while second homes and vacation homes remain the weakest sector. Remodeling projects are reported to be growing at a healthy pace according to residential architects.

Upscale out, home office in
The precipitous decline in house prices over the past five years and the resulting growth in the number of homeowners with delinquent mortgages or mortgages in foreclosure has dramatically changed the way that households are making decisions, as well as using the space within their homes. So, for example, when we asked residential architects for the most popular special function room in homes at present, very few mentioned previously popular upscale examples.
Special function rooms that remain popular include home offices, outdoor living spaces, and mud rooms. Home offices appeal to telecommuting workers as well as to the growing number of individuals who work exclusively out of their home. Outdoor living areas and outdoor rooms reflect the growing interest in expanding the household’s living space into the outdoors. Interest in mud rooms reflects the need for additional closets and other storage space, as well as the increasing informality of space in the home.
With the downsizing of homes, special function rooms have been disappearing. For media rooms/home theaters, exercise/fitness rooms, hobby/game rooms, home workshops, kid’s wings/guest wings, interior kennels, and interior greenhouses, a growing share of residential architects responding to this survey indicated that interest in these spaces was declining. This leaves only a few examples (notably outside living areas and home offices) where there was general consensus among residential architects that interest among households is increasing.
Special features that promote accessibility through the home include a first floor master bedroom, ramps and elevators, and easy-to-use features like handles and faucets, and nonslip floor surfaces. These features are still reported to be increasing in popularity by a minority of respondents, but the share of residential architects reporting an increase in popularity of these projects has uniformly fallen over the past year.

Business falters in second quarter
Since hitting a low at the end of 2008, business conditions at residential architecture firms had been making steady progress toward recovery. In fact, in the first quarter of this year, residential architects reported a small increase in billings, the first quarterly increase since mid-2007. However, the second quarter showed a reversal of this trend, with a billing score just under 41, down from a score of just over 50 in the first quarter. A national billings score of 41 indicates that more residential architecture firms reported a decline in billings in the second quarter than reported an increase, so that in total, billings at residential architecture firms declined. In all likelihood, the softening of firm billings at residential architecture firms reflects the general weakness in the economy during that quarter, and the home buyer tax credit expired at the end of April.
The national downturn in billings at residential architecture firms has affected firms in all regions of the country. In the second quarter, the billings score was below 50 for every major region, ranging from a low of 35 in the South to a high of 47 in the Northeast. In general, the South and West regions that had seen stronger levels of residential construction activity prior to the downturn are currently seeing weaker billings conditions at present because they had a higher base to fall from. Also, the Northeast and Midwest have a higher share of home improvement activity, which at present is the strongest residential sector.
Residential architects report that home improvement activity is growing at a fairly healthy rate. Both kitchen and bath remodels and additions and alterations to existing homes have healthy sector scores with this survey, with kitchen and bath remodeling having increased from its reading of a year ago. Without an overbuilding problem like in the new construction market, home improvement activity has been able to stage a healthier recovery than new construction. Click here to see the full AIA report.

Ready for a recovery

Home sales and housing starts staged an uneven comeback starting in early 2009, according to the State of the Nation’s Housing report released by the Joint Center for Housing Studies of Harvard University.
Even if the recovery in sales and residential construction flourishes, the report warns, the adverse consequences of the recession and the financial crisis will linger. An estimated one in seven homeowners have homes worth less than what they owe on their mortgages and nearly 5 million need their home prices to rebound by 25 percent before they are back above water. In addition, it will take time to work through all the homes in foreclosure.
Despite falling home prices, loan modifications, and softening rents, the downturn did not reduce the number of households spending half or more of their income on housing—18.6 million in 2008. Instead, the share with such severe housing cost burdens climbed to a new height.
Is a recovery coming? Hooker Furniture announced reported net sales of $51.4 million and a net income of $1.1 million. The profit reversed a $456,000 loss in the comparable quarter a year earlier. While this may not signal unbridled consumer spending, purchases can only be put off for so long.
Stay tuned.

February furniture orders 13% higher than 2009

New residential furniture orders were 13 percent higher in February 2010 than 2009, according to Smith Leonard’s Furniture Insights, a monthly survey of residential furniture manufacturers and distributors.
This marked the fourth month in a row that orders were up over the previous year’s same month comparison. (October was flat, November up 10 percent, December up 12 percent and January up 4 percent.) Admittedly, all of these months were comparing to poor results in the previous year. But the good news is that we seem to have stopped the downward flow.
Shipments in February were 4 percent higher than February 2009. January shipments were 6 percent higher than January 2009, resulting in the year-to-date shipments up 5 percent over the same two months of last year. This was the third month in a row that shipments were up over the same period a year ago.

Jan. 2010 furniture orders up

January 2010 new furniture orders were positive again compared to January 2009, according to Smith Leonard's most recent Furniture Insights survey of residential furniture manufacturers and distributors.
While not quite as positive as the November and December results, orders still were in positive territory, showing a four percent increase over January 2009.
This four percent increase follows a 12 percent increase in December, a 10 percent increase in November and a flat October, in year-over-year comparisons. The study found January results negatively impacted by bad weather, and expect February results also to be affected.
Some 59 percent of survey participants reported increased orders, down slightly from 62 percent in December.
Shipments in January were six percent higher than January 2009, following a three percent increase in December. While shipments were down 24 percent in January 2009 versus January 2008, December’s increase in shipments was the first since June 2006.
Shipments in January were 10 percent lower than December 2009, somewhat normal in the January to December comparisons, according to the study. Approximately 62 percent of survey participants reported increased shipments in January, up from about 50 percent in December.