Architects See Growth in Home Efficiency

In order to address rapidly escalating home energy costs, homeowners are reacting with a sharp increase in the preference for energy efficient management systems and products, according to the American Institute of Architects (AIA) Home Design Trends Survey for the second quarter of 2006.

“Our data indicates that consumers are becoming increasingly aware of the energy efficient options that are available in the marketplace, and they are requesting that architects incorporate them into the design and remodeling of their homes,” said AIA Chief Economist Kermit Baker, PhD, Hon. AIA. “There was a significant jump in the percentage of survey respondents - from 38 to 54 — who indicated that demand for energy management systems has increased over last year.”

A recent AIA poll from this year that revealed that 90 percent of consumers would be willing to pay $5,000 more for a house that would use less energy and protect the Earth.

“Whether you add insulation, replace single pane windows, install motorized dampers to close ductwork in unoccupied areas or employ a fully integrated digital energy controller, there are a host of options available to make homes more energy efficient,” said Lisa Stacholy, chair of AIA Small Projects Practitioners committee. “The best way to determine which methods are going to be the most effective at reducing utility costs is to consult an architect before committing to any home improvement work so they can evaluate the various aspects and can then chart a course that will result in the best solution and return on investment.”

Housing Design Market Slower

While billings at residential architecture firms are representative of the slowdown in the overall housing sector, architecture firms are reporting steady backlogs for projects with an average of 5.6 months of work under contract. There continues to be strong demand for remodeling and renovation projects despite new construction being significantly weaker than a year ago.

Specific construction segments (index score computes as % of respondents reporting improving minus those reporting weakening conditions)

  •  Additions / alterations: 52%
  •  Kitchen and bath remodeling: 50%
  •  Townhouse / condo market: 24%
  •  Second / vacation home market: 2%
  •  Custom / luxury home market: -1%
  •  Move-up home market: -3%
  •  First-time buyer / affordable home market: -25%

Remodeling Market Data
Census Quantifies Tallies High Revenue Remodelers

The Census Bureau recently put the finishing touches on data from the most recent Census of Construction in a report Residential Remodelers: 2002. In it, the Census has revised upward the number of professional remodeling firms in the United States.

Using data collected in 2002, it pegged the total number of residential remodeling firms at 82,750, up from the previous estimate of 63,000 in 1997.

Of significant interest was the revenue breakdown of this group. The Census Bureau report found that in 2002, there were 22,544 remodeling firms with revenue greater than $500,000 and approximately 10,000 firms with over $1 million in revenue reported. At the very top of the industry, 866 firms reported revenue in excess of $5 million. For more information go to www.census.gov.

Market Demographics
Hispanics Having Big Impact on Housing

Today, hispanics make up about 14 percent of the total U.S. population and are projected to account for up to 25 percent of the nation’s population by as soon as 2015. And the ripples are already being felt in the housing and remodeling markets, says NAHB Chief Economist David Seiders.

Primary among the data released by the NAHB in a news conference last month, is a higher number of individuals per household. Former HUD secretary Henry Cisneros, who now is chairman of an urban home building company, CityView, says it is driving change in home and community design. He says that contractors and designers should begin to tweak the design of housing product for the Hispanic community primarily to include more bedrooms. Many families are willing to forgo traditional spaces like garages and formal living rooms for more bedrooms.

Cisneros, who recently wrote a book on the subject of a burgeoning Hispanic population and its impact on housing Casa Y Comunidad: Latino Home and Neighborhood Design, says that Hispanics are more likely to move into an entry level home and earn less individually, but the aggregation of income as a household allows for the purchase of a middle class home. Also significant he says is that financial literacy is an issue. New immigrants will need more education toward greater financial literacy. Good design and marketing will be key to increasing Latino homeownership, Cisneros added.

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