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The Sullivan Group Market Observer
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Although the economy is slowing and the housing market has weakened, a case can still be made that with historically low interest rates, solid job growth and motivated sellers, it is a great time to buy a home. Yet potential homebuyers are sitting on the sidelines. So why the buyer reluctance? Among the many reasons is a fear of further economic weakening or the pursuit of a better deal. But sellers still have one thing going for them: consumers are compelled to buy by great design; and without it, they will not push forward on a sale.
Take It From PCBC
PCBC's annual Gold Nugget Awards, which took place in San Francisco this past June, acknowledged and awarded some of the new and best designs. Following are examples of the designs that the Gold Nugget Awards highlighted, and as the MC of the event, the trends that I believe to be on the rise.
As reflected in this year's awards, the first large scale trend of note in the west is fewer massive master planned communities and more of the smaller infill communities. This comes as no surprise, thanks to a restricted land supply in most western markets. Further, if the housing market remains tepid for the foreseeable future, smaller communities will make more sense since they can be turned quicker and, as a result, reduce capital risk.
What's more is that lots and homes, whether detached or attached, are downsizing. Square footage is working harder and pushed to maximum efficiency. Two-story foyers and high-volume great rooms are being eliminated, particularly in light of rising energy costs. Architects and builders are focusing less on overblown designs and more on functional features such as built-in storage and multi-purpose rooms.
Another trend is the increasing prominence of sustainable design and green building materials. Many of this year's winners prove that green building can be both innovative and beautiful. As consumers become more educated in the "win-win" presented by "green" housing and builders become savvy to the creation and construction of it, we expect this trend to grow in popularity in the following decade.
Also gaining attention, as the Gold Nugget judges highlighted, is Craftsman style architecture, which is demonstrating a nationwide resurgence in both attached and detached homes at all price points. Because Craftsman style usually has some local historic precedent, it seems to fit into most neighborhoods, furthering its growing demand.
In fact, architecture is becoming a major American export. This is reflected in the number of Tuscan/Mediterranean resort-style homes (seen in this year's Gold Nugget) popping up in places like Beijing. These products and new communities look like they could be in California. Not surprisingly, however, many of our architecture clients are now working in multiple countries, including throughout the Middle East, Western Europe and Southeast Asia.
A final trend of many identified at the Gold Nugget Awards is the continued creativity applied to outdoor living spaces – now necessary elements of home design at all price points, even in nastier climates. The proliferation of outdoor kitchen appliances, furniture, fireplaces, and the like is an obvious response to buyer demand for outdoor living, a wave that is not limited to single-family homes.
The housing market is tough right now and the behavior of consumers is not generally within the control of the industry. However, one bright light leading to an increased chance of securing a sale is through the execution of great product. And this year's Gold Nugget provides a glance at some of the best examples of excellent execution.
For a copy of this year's Gold Nugget Winners go to www.goldnuggetawards.com.
This article was inspired by the great job done by all of the 2006 Gold Nugget judges. We also appreciate the keen eye and commentary provided by Jenny Sullivan of BUILDER Magazine, architect Donal O'Callaghan, and Nick Lehnert of Distinguished Homes.
Volume 2
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Architects and builders are focusing less on overblown designs and more on functional features such as built-in storage and multi-purpose rooms.
- Tim Sullivan
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