At Home in Berks February 2017 - 26

ANGLES
Builders are increasingly focused on understanding, if not
building specifically for, this group. In October, Meritage
Homes unveiled its LiVE.NOW. homes category, which targets
first-time buyers with homes featuring smaller footprints and
energy-efficient amenities. Toll Brothers followed in December,
announcing it would launch its T|Select line of homes in Houston in January 2017. The line will feature fewer options and
upgrades than the company's typical offerings. This follows the
2014 launch of D.R. Horton's Express Homes, which eye the
entry-level buyer, and aligns with the positioning of entry-level
players like LGI Homes.
Experts hope an infusion of new construction at the lower end
of the market will spur this group into action. "For new homes,
the share [of the market] that's below the benchmark rate of
$300,000 is still around 50%, maybe a little below that. I would
like to see it get closer to 55%," Carbacho-Burgos said. Before
the housing market crash, the share of new construction priced
under the median was closer to 55%, but new-home prices have
increased since then, hence the lower share and the reason why
first-time buyers today typically don't buy newly built homes.
A report last month from Trulia noted that starter home
inventory posted its largest drop in three years during the fourth
quarter, down 12.1% year-over-year, and that first-time buyers
spent 1.9% more of their income on these homes than they
did a year ago. The national median list price of a starter home,
according to the real estate website, was $164,920 for the period,
up 7.6% from the year-earlier period.
Still, putting a community on the fringe of an active market
and paring down the product to lower its price-point doesn't
mean younger, first-time buyers will bite. "It's very untested at
this point," said Devyn Bachman, a research analyst at John
Burns Real Estate Consulting.
So what will get younger, first-time buyers in the market?
Slow but steady wage gains and overall economic recovery.
"We've already seen strong job growth in 2016 and continued job
growth in the last few months," the NAR's Hale said. "We think
that will be a strong factor into 2017."

A residential addition featuring new windows.
Credit: Flickr Brock Bilders Marvin Windows

Homes will get tighter and smarter
On the design side, trends for single-family construction and
renovations include more efficient insulation, low-flow fixtures
and appliances, LED lighting and generally tighter envelopes.
For multifamily, developers and owners are eyeing products
that take energy consumption decisions out of occupants' hands,
such as sensors for lighting and programmable thermostats, according to Michelle Foster, vice president of innovation services
at the Home Innovation Research Labs, an NAHB subsidiary
that focuses on green product and systems research.
Solar, too, could make strides in 2017, she added, citing Tesla's
recent bid to revamp rooftop photovoltaics for residential applications. "It's something that consumers generally like the idea of
and want, [but] the price point has not been right and they still
have an aesthetic hurdle," she said.
Builders have been sensitive in adding additional line items to
projects, she said, as recent increases in material and labor costs
are already being passed on to buyers. That's been a limiting
factor for new technology and products.
Homeowners are also asking for more and larger windows,
accord to a recent survey of residential architecture firms, in response to building technology advances around energy efficiency.
The survey also noted more demand for cool roof and fire-resistant exterior technology in 2016, which will likely increase in
the new year.

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