KBB - January/February 2013 - (Page 19)

Are you seeing any trends relating to the baby boomers? Yes, we are, and our report covers them quite a bit. The baby boomers didn’t do nearly as badly as younger households because most have owned their home for a while. When prices dropped, that burned off some of the appreciation built up over the last 15 to 20 years but not all of it, leaving them with some equity in their home. Baby boomers are willing to continue to invest in their homes, and as best we can tell, their share of the market has been growing pretty significantly in the last five years. Some industry experts are seeing a move into cities. Are you seeing this as well? I work with the American Institute of Architects (AIA) on quarterly surveys on design trends, and what architects are telling us is the number one locational preference is infill housing in urban areas. So that’s true, but you have to put that in the context of the years from 2004 to early 2006, when at the peak of the boom, 2.2 million homes were being built on an annual basis. Big plots of land were needed to generate that level of production, so you were moving farther and farther out from urban areas for 200- to 400- The projects are more geared toward maintaining the structural integrity of the home and were the ones getting tax credits during the stimulus program. They also tend to be more energy-efficiency-focused. If you ask contractors what share of their projects has energy efficiency as a goal, it has gone up. Is it because more households are fundamentally green in their outlook? It may well be. But it may also have a lot to do with what they think energy costs are going to be. As an aside, we’ve had a kind of revolution in terms of new energy opportunities in the United States. With all the fracking that’s going on, natural gas prices have been driven down and now they’re beginning to frack a little more oil, too. A report by a European group came out on Veterans Day projecting that, based on all the new extraction technology we currently have, the United States will become the largest oil producer by 2020, surpassing Saudia Arabia. Environmental concerns can limit that production, too, but with the new technologies, there are more opportunities for traditional carbon-based energy resources. But what is this going to mean for the sustainability movement? If energy becomes cheap again, are people just going to lose interest in trying to achieve more energy efficiency? It’s going to an interesting dichotomy In 2011, home improvement activity on distressed properties amounted to about $10 billion for that year… unit parcels. Now, three to five-unit parcels are in demand, and you don’t go 50 miles outside a metro area for those because you also have to build all the infrastructure. Instead, you look for small, more convenient build-out lots, which tend to be more infill locations. Secondly, the people looking for housing are often younger folks who want to rent. They don’t want to rent in the exurbs in a big singlefamily subdivision. They want something smaller, more convenient and more affordable. So the pressures have changed. We’re seeing, at least temporarily, a redirection of the location of activity, but this has more to do with the specific circumstances of the housing market and who at this point in time is really looking for housing. The national homeownership rate over this time has declined 4 to 5 percentage points, too, so a lot of people, including those forming households, are moving from owning to renting. And rentals tend to be in more urban locations, where there’s close access to public transportation or other conveniences. As the market recovers, people will begin to seek more homeownership opportunities. When people get married and have children—a very familiar pattern—they’ll start looking at more suburban locations but probably not the big exurban developments because I don’t think we’re going to see that level of construction again for a long time. These “onesy, twosy” lots that are very convenient now will get built out and you’ll have to look for other opportunities. And it’ll be more inner locations rather than exurbs. So I don’t know if this is a huge back-to-the-city movement, where people suddenly decide they want to live downtown. It has more to do with the particular circumstances we’re in now. because energy independence has been one of the national goals for quite a while. And suddenly overnight, it looks like it might be materializing. We have to ask ourselves,“Is this really what we wanted?” Has anything surprised you? As I said, I was quite surprised our leading indicator was pointing to such strong growth as we move into 2013. But as I thought about it, that’s sort of the level of growth we’re seeing in the housing market, so it makes sense we’re seeing it on the home improvement side, too. We’re going to spend a lot of time in this report talking about reinvesting in distressed properties, which has not been a topic we’ve ever covered before. We’re also going to discuss green issues and how much improvement we’ve seen in retrofitting the distressed housing stock. According to a Department of Energy survey, homes built in the 1950s, ’60s and ’70s use about 25 percent more energy per square foot than homes built over the last decade—not a big surprise but a pretty big number. The corollary to that is when we look at older versions of the same survey, the homes built in the 1950s to ’70s use 30 to 35 percent less energy now than they did 20 to 30 years ago. So you’re talking about a fixed stock of homes that has been improved through retrofits and energy upgrades. The magnitude of that effect is greater than the differential between old homes and new homes, which just goes to show there’s more potential in improving older homes than there is in building new homes to higher standards, especially as we have 130 million homes in our housing stock. n —Alice Liao For the complete interview, go to www.kbbonline.com/Baker. Is there still interest in green design? Green design has been a growing share of the market, partly because we’re seeing more replacement projects: roofing, siding, windows, doors. www.kbbonline.com / January/February 2013 + K BB 19 http://www.kbbonline.com/Baker http://www.kbbonline.com

Table of Contents for the Digital Edition of KBB - January/February 2013

KBB - January/February 2013
Contents
Online Contents
Editorial
Show Director’s Note
KBIS Special Section
Web Savvy
Focus
Trends
Products
Design Feature: A Touch of Glass
Design Feature: Glam Rock
Practice
Ad Index
Favorites

KBB - January/February 2013