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Homeowners, and their architects,

By Maryann Giacobbe

Real Estate Sales Representative with Houlihan Lawrence

May 10, 2013 02:58 AM

As a nascent design and construction recovery spreads from region to region and building sector to building sector, one of the first tangible expressions of this long-awaited turnaround is arriving. Homeowners, and their architects, are looking to add more value and function to two vital and specialized rooms that are often the last to be downsized when a recession strikes: kitchens and baths.

During the housing downturn, less attention was paid to these areas as households were looking to control costs for new homes, and to limit home improvement expenditures on existing homes. As housing markets have begun to recover, households are concentrating more on these areas. More activities are taking place in kitchens, as they are regaining their role as “control center” of the home. While they haven’t significantly increased in size, they generally are utilizing more technology.

Likewise, bathrooms are getting more attention. Along with kitchens, baths tend to garner a lot of attention for new homebuyers, and are among the first spaces to be upgraded in existing homes. Accessibility into and around the bathroom is a growing concern for homeowners, particularly those who may be planning to remain in their current home as they age in place.

These are the major findings from the AIA Home Design Trends Survey (HDTS) for the fourth quarter of 2012, which focused on kitchen and bath design trends. Through comprehensive surveys of residential architects nationally, this effort explores emerging design trends by examining the space devoted to these rooms for both new homes as well as for improvements to existing homes.

Kitchens take on new functions

The number and size of kitchen/food preparation/food storage areas has been flat or trending down since 2009. However, this quarter many residential architects are indicating increased emphasis on these areas of the home. Almost a quarter of respondents indicated that the number of separate kitchen facilities or secondary food storage or food preparation areas is generally increasing in popularity, while only 11 percent point to a decrease in popularity. For the size of kitchen facilities, 22 percent point to an increase, and 11 percent report a decrease, responses that are very similar to the survey results from 2011. (Figure 1)

While there are indications of a modest increase in space devoted to kitchen activities, there has been a greater change in the space devoted to new activities that are centered in the kitchen. More than half of residential architects point to an increase in space for a computer station or recharging area for cell phones, tablets, and other personal digital devices. Likewise, more than 40 percent of respondents indicated an increase in space for recycling activities or pantry space, with few respondents indicating a decrease in these activities.

Integrating family space with kitchens remains a very popular design option in homes, as does designing kitchens for adaptability with universal design features. Even though the popularity of these features remained strong during the downturn, they have increased in popularity even more as the housing market continues to recover. (Figure 2)

Sustainable products remain popular in kitchens, but recently there has also been a revival in upper-end kitchen products. Countertops and flooring from renewal/sustainable materials, as well as drinking-water-filtration systems remain popular kitchen products, although the pace of increase in popularity has slowed somewhat from a year ago. (Figure 3)

Bathrooms also seeing increased design attention

As with kitchens, residential architects are also reporting modest increases in the number and size of bathrooms in homes. One in five respondents report that the number of bathrooms in homes has been increasing (compared to only 4 percent reporting declines), while 22 percent report that the size of baths has been growing over the past year. These responses show greater gains than have been reported by residential architects over the past few years, and are consistent with the increased size of homes reported in recent U.S. Census Bureau statistics. (Figure 4)

While new technologies are often driving kitchen design, bathroom design is heavily dependent on making these homes more accessible and adaptable as housing needs change. Well over half (57 percent) of respondents reported that adaptability/universal design features were increasing in popularity, while only 3 percent responded that this concern was decreasing.

Possibly related to the increased interest in universal design, or possibly just reflecting changing preferences, designing bathrooms with only a stall shower and no bathtub is becoming a more common practice. Half of respondents indicated that this trend was gaining in popularity, while hardly any pointed to a decline in popularity for this option (Figure 5)

Accessibility for bath products was another theme growing in popularity. Over 60 percent of respondents reported that doorless/no-threshold showers were growing in popularity, compared to fewer than 5 percent reporting waning interest. Hand showers, often with universal design applications, are also continuing to become more popular.

However, most of the bath products that top the popularity list promote sustainability. At the top is LED lighting, with nearly 70 percent of respondents indicating that it is increasing in use. Water-saving toilets and dual-flush toilets are both highly rated in terms of growing popularity. While upscale bathroom products generally are not high on this list, specialty upscale showers were seeing some increase. (Figure 6)

Business conditions clearly improving for residential architects

Residential architects are reporting a clear upturn in business conditions at their firms. In the fourth quarter, the billings score at these firms was 54.2, where any score above 50 indicates growing revenue. The billings score for the fourth quarter of 2011 was 48.3, signifying a modest decline. However, billings increased in subsequent quarters, so growth has now been reported for a full year.

Inquiries for new project activity have also been strong, reaching a score of 63.5 in the fourth quarter. Almost half (46 percent) of respondents indicated that inquiries had increased during that quarter, while only 19 percent indicated that they had declined. These four straight quarterly gains in both billings and inquiries at residential architecture firms suggest significant momentum in residential design activity heading into 2013. (Figure 7)

With continued growth in residential design activity, firms are starting to build up some project backlogs. Project backlogs, an indicator of the amount of work currently in-house and under contract, are measured in terms of the amount of time that these projects would keep current staff fully employed. At the peak of the market last decade, project backlogs were running close to five months. During the downturn, backlogs were averaging closer to three months. Over the past two years, backlogs have been trending up, reaching 3.7 months on average in the fourth quarter. One in five firms had less than one month of backlog, while almost as many had six months or more work in house. The most common backlog volume was one to three months, as indicated by 38 percent of respondents. (Figure 8)

As residential design activity has recovered nationally, firms in all regions of the country have reported better business conditions. However, business trends have been quite volatile within individual regions in recent quarters. For example, residential architecture firms in the Midwest had reported the strongest business conditions of any region of the country in each of the first three quarters of last year, and then dipped to a modest decline in the fourth quarter as firms in the other regions reported solid gains.

Currently, firms in the South and West are reporting the healthiest business conditions, with billings scores of 56.2 and 58.6, respectively, in the fourth quarter. These regions were generally the most overbuilt during the last upturn, and therefore often saw the steepest declines after the market crash. However, as the national economy continues to recover, a disproportionate share of building activity is located in these Sunbelt regions. (Figure 9)

The recovery is finally showing up as improved conditions in most of the major residential building sectors as well. While home improvement activity—both additions and alterations to existing facilities as well as kitchen and bath remodels—remained relatively healthy during the downturn, there have been extended downturns for homes designed for entry-level and move-up buyers. The townhouse and condo market, as well as the second and vacation home market, generally saw even steeper declines in construction levels during the downturn.

However, there were the beginnings of a broad-based recovery across the major building sectors in the fourth quarter of last year. Residential architects reported that, on net, market conditions were improving for first-time buyer/affordable homes, move-up homes, and custom and luxury homes. In the fourth quarter of 2011, conditions in all of these sectors were negative.

Additionally, market conditions for townhouses and condos were marginally negative last quarter, and much worse off in the same quarter of 2011. That leaves the second and vacation home market as the sole home building sector that doesn’t appear to be in recovery or poised for one. Since many of these homes are solely or partially investment properties, the steep decline in house prices during the downturn has hit this building segment particularly hard.

At the other extreme, there was further optimism for conditions in the home improvement sector. More than 60 percent of respondents reported improving conditions for the additions and alterations, and kitchen and bath remodeling portions of the home improvement market. These sectors were rated as relatively healthy even during the downturn. However, the recent upturn has pushed scores for these sectors even higher. (Figure 10)