Mike Johnson – Architect – AIA – Nash and Associates Architects

Production Home Design Newsletter – Volume I – 2023

As 2022 drew to a close we saw some major changes in our housing market. Analyzing these changes and how they affect your market and the design trends for 2023-24 becomes even more important.

The rise in mortgage rates, the steady increase in inflation, and the return of many to the office in 2022 created challenges as well as opportunities. The extremely low mortgage rates we had become accustomed to fueled a historical rise in home values. At the same time, many markets were unable to provide new housing, due to the lack of available land to develop, the increased time required to get plat entitlements and building permits, and supply chain and labor challenges. This helped to push prices even higher in those markets.

As the year went on, the mid-3 percent mortgage rate spiked up to over 7 percent by late summer. Consumer buying power diminished as their budgets were already strained with the inflation of food prices, gas prices and general household goods. The day of having multiple escalating offers and 25% over asking price cash offers disappeared almost overnight. I have spoken to several customers who mentioned during the 3rd weekend of March their model home had thirty groups go through. The next week only two groups toured the model. This lower number became the new normal. Buyers no longer worry about missing a home. Many buyers put in offers on twenty or more homes, only to get beat out by even a stronger offer.

Buyer fatigue set in and then with rising mortgage rates, buyers pulled back. Will prices go down 15%-25%? No one wants to buy at the peak and find out the home they scrimped and saved for is now worth 25% less than what they paid. The housing market for many years, in my opinion, for many buyers wavered away from the attachment to a home as a lifestyle improvement; a place to grow their family, a place of relaxation and retreat, a place of pride. They began to see their home as a burden and not necessarily what they wanted. They needed a new home in a certain market at a certain price and at the time, there were only a couple to choose from. They did not necessarily like the home or imagine it working for their family, however the scarcity and fear of the prices going even higher made them buy a home they did not love or a home that did not function well for them. I strongly believe that owning a home provides not just a financial investment but also provides the homeowner with a sense of pride and accomplishment. A good home can nurture those within. A good home can create desire and want for a healthier lifestyle. A good home provides warmth, shelter, and a feeling of belonging to a community.

Even in a challenging market, buyers are out there. It takes a bit more to get them to see the home you have built. It takes more to get them to consider purchasing the home you built. It takes more effort to tailor your design and sales strategy. A good home stands out. A good home provides memory points for a buyer who now has the opportunity to see possibly dozens of new homes over a weekend. How does your product stand out? You want potential buyers to remember you. Keep in mind that standing out and providing memory points in your homes is not just for high end homes. It translates across all price points and buyer’s groups. Creating desirable homes will also motivate first time buyers to make the leap to home ownership. Certain buyer groups and price points value certain elements over others, and some design features are not financially feasible at lower price points.

In this article, I want to discuss four design trends for 2023 that can be done in home designs across all price points and buyer’s groups to help make your homes stand out and make your product desirable. Desirable product can turn someone who is not looking to buy into a buyer. Desirable product can make a buyer decide that the home they are looking to upgrade is possible and worth the increased financial cost and higher mortgage rate.

1. Useful and Meaningful Storage:

We have a lot of stuff. Some people have a little bit and some people have quite a lot. Our possessions can offer us comfort, support, and for some, anxiety. Our stuff changes as we grow older and family dynamics change over time. Stuff can be clothes, work items, outdoor gear, treasured family mementos, holiday decorations and on and on. Having clean and conditioned spaces to put away our items helps to de-clutter our bedrooms, kitchens, living rooms and offices. Having dedicated areas for items helps us organize and take better care of our items. Look at how many Netflix shows are dedicated to organizing our homes and our stuff. There are countless Instagram pages dedicated to ways to organize and store our items in fun and creative ways. Proper storage and having items easily found allows them to be used more often and be taken care of. It also allows us to easily remove items that we no longer need. This is much more difficult if these items are buried in a box in the back of the garage. Keep in mind that many buyers who move every few years due to employment don’t ever fully unpack.

Having a clean area within the home to keep boxes of mementos until the next move is something to keep in mind.

Oversized coat closets, walk in pantries, walk in closets and mudrooms are some of the lowest price per square foot areas to build however they are quite often overlooked in home design. The old idea that people just use the garage or the attic needs to be rethought. Attics are not conditioned spaces and treasured items tend to degrade faster in unconditioned spaces.

Most homes attics are also very shallow and don’t allow for storage. Garages can be dirty rooms and subject to possible flooding, are most often not conditioned and also remove the ability to park vehicles inside.  Here are some suggestions:

Coat closets:
Not just one on the main floor but two of them. One for guests, one for the resident. Maybe one of them stores the vacuum..or the extra leaf in the dining room table. Make the coat closet deeper than the normal 2’-0” so that luggage may be stored inside or additional racks below for shoes.

This spaces take much of the dirty burden away from the rest of the main floor. A bench with open storage underneath gives space for winter hats, gloves and scarfs. The dog’s toys might be stored underneath. A drop counter gives the buyer a place to drop their keys, cell phone, receipts out of their pocket and it’s a place to place grocery bags before coming into the home. The open floorspace is a place to take off boots, take off wet and snowy clothing before it comes into the house. Additional closets and bins allow this space to take the burden of stuff away from the dining room table or the laundry room. Mudrooms are often the place where a litterbox for the house cat will reside or it’s the dog’s home overnight in their crate. This is not a glamourous space however the mudroom is a very useful and very practical space. It is also an area quite often overlooked in home design or if there is a mudroom, it is very small and just has a 30” wide bench with nothing else.

Oversized Working Pantries:
Not just a corner pantry or a cabinet pantry, an oversized working pantry will hold large amounts of food supplies but can also hold cleaning supplies, grocery bags and other general household items. A lot of buyers have rechargable vacuums. An outlet in the pantry or two is a must not just for recharable cleaning appliances but also small kitchen appliances. This allows these items to stay out of the kitchen. Provide extra deep solid shelving for larger items. If room allows, a full size bank of lower cabinets provides extra areas to store large items that are out of sight.

Linen Closets:
Another item that is overlooked in many home designs is the linen closet. Every bathroom should have one either inside or just outside in the hallway. Being able to properly store towels, extra sheets and pillows, toiletries and other household bedding items keeps them clean and also keeps them off the countertops in the bathroom. Remember that most bedding items are quite large when folded so make at least one linen closet at least 6’-0” wide.

Oversized Closets for Bedrooms:
Think of not just clothing items going into walk in closets but also long term clothing storage for different seasons, holiday decorations, Christmas gift storage, family mementos and luggage. I have told customers over the years that no one has ever said that a primary bedroom has too big of a closet and how they wont buy the home because the closet is too big. If you think as a builder that the closet is too big, there will be buyers who will think otherwise. Think of a bedroom closet also as a place of retreat, luxury, playhouse for the kids and also a place for a temporary nursery or a hide-away home office.

Don’t Forget the Bonus Room, Loft, Office and Laundry Closet:
Bonus rooms, lofts, offices and laundry rooms also need closets. These spaces need places to store board games, puzzles, work from home items, paper, kids crafts, extra pillows, seasonal storage and washing/clothes cleaning supplies. Remember that every item that has a purposeful place to be stored is one less item that is being left out on a countertop or in the corner of a room.

2. Creating “Away” Spaces within a home

While the Covid pandemic was making us work from home, study from home and literally stay home, we were in our homes being around our immediate families for periods of time that most of us were not used to. The camaraderie that was experienced quite often brought families closer together but also caused conflicts between family members. Homes with large open living areas with individual family members on their own individual entertainment devices and trying to work while subject to others noises and distractions caused auditory conflicts. As many of us now watch our streaming services, watch movies and play video games on our phones and tablets, the need for a central media room or tv watching area has decreased. Working from home doesn’t necessarily require the spacious home office. It usually requires a space for writing, the laptop and sometimes as the need arises, a quiet place for phone calls and Zoom/Teams meetings. Storage of work materials, wireless printer and files needs a small closet next to the workspace. Here are some suggestions:

Pocket Office:
This smaller office space provides the quiet nook to work from home, do homework without distraction or do crafts. Smaller intimate spaces with lower ceilings and warm colors and woods can help calm us and create a quiet work environment to help de-stress. If space allows, a storage closet or storage cabinets help remove the work supplies, craft and school clutter from the space and can allow different users to work within the same space at different times. When one task is done, the items used for the task can be put away and other items can be taken out of storage for the next task either by the same user or a different user. I have said to numerous customers who think work from home is not something that will be around in a couple years, remember that these spaces are flexible and have many uses by homebuyers.

Cozy Nooks:
Cozy nooks are intimate small spaces. They can be a corner of a room, they can be a small space off the great room or an area under the stairs. These cozy nooks allow someone a place to read a book, watch a show on their tablet or phone or take a nap. Open floorplans are great and here to stay but quite often they can be too open to feel comfortable. Providing little spaces off of them creates little memory points for potential homebuyers. Depending on budget, these spaces can be heavily staged and trimmed with built ins or can be simply left open and let the buyer’s imagination run wild with what they want to use the space for.

Don’t forget about the Garage:
Many of us like to spend a lot of time in our garage. It’s a place for different types of projects and crafting. A buyer may enjoy creating stained glass pieces, doing fly fish tying, growing tomato seedlings, throwing darts or working out. I recommend if possible to create a nook off the side of the garage or the back of the garage to allow room for activities and hobbies. Make sure to add a window in these spaces for natural light. If this area is not used for hobbies by a buyer, it serves also as an additional area for storage.

3. Creating a “Custom” feeling home and a custom feeling neighborhood

As a speculative home builder/developer, this third item is the most tricky and controversial. As a builder/developer needing wide appeal of their product, making sure you serve the needs and desires of multiple segments of buyers is required to allow for product absorption. The need to not “turn off” buyers by being too specific can lead to product lines not having pizzaz or a feeling of uniqueness is the opinion of many home builder/developers. I chose to say that we don’t make the house weird or strange or too specific in finish, we give the home an identity. What is the home? Is it a Craftsman style home? Is it a farmhouse style home? Is it a modern styled home? Give the home a presence. If the home has modern styling on the outside, give it modern styling on the inside. I chuckle when I see a new home with strong exterior modern style but on the inside, the home has craftsman shaker cabinets and thick and heavy craftsman door and window trim. Buyers especially in the higher end price ranges are quite smart and have pointed out homes to me that they call “confused”. With the popularity of Instagram and Pinterest, buyers are savvy and know when they see a home that doesn’t have an identity or style. Creating a design concept that carries all the way through the exterior and interior will make your home stand out and will not only stand out in the buyers memory but will also result in higher sales prices. I strongly recommend this apply to the entire plan series in a community. Community design doesn’t not have to be one style. A mix of styles appeals to a wide range of buyers and creates more dynamic communities. With the rise of stronger city and master plan design guidelines, the need for multiple exterior styles is now required by code. A mix of exterior styles and building massing creates communities that appear more established then their homogenous counterparts. Introduce the occasional unique floorplan to your community. Introduce a unique architectural style on a corner lot. Create landmarks in your community design. These don’t have to be expensive. Maybe one particular home has a full wrap around front porch on a corner lot; maybe one home in a long row of homes looks like an old farmhouse.

The custom feeling also is expressed on the inside of the home. Create nooks and spaces in key areas for furniture. At foyers, make sure there is an area or a recess for the entry console table. In the dining area, make sure there is room or a recess for the dining buffet. Prominent walls or long hallways have ship lap detailing or other special trim details. These special treatments don’t have to be large or expansive. Highlight ends of hallways or niches. Lower the ceilings with soffits over furniture recesses. To the buyer, make it apparent that you as the builder/developer have made their home “special” and thought of how they live in their home and furnish their home.

4. “Trim the Fat” Creating homes that are more efficient

Doing more with less. Being more efficient. Downsizing the overall box to focus on what’s inside.

There are many ways to explain this trend. With the significant rise in inflation and construction costs, building just a “bigger” house isn’t as economical as it used to be. Higher mortgage rates have now made smaller price point jumps harder to obtain for many buyers. A $15,000 price point jump between a 2200 square home to the next plan which is 2400 square feet may turn away multiple buyers. For many years, large price jumps only would account for small monthly payment increases. That is not the case anymore. Designing homes to fit the room count and features needed and not a square footage number is a trend that is here and will continue to be popular. Creating homes that meet the need of a buyer with the rooms and features they need without the extra 400 square feet of “fluff” is critical to allow for price decreases from current levels within product lines. I recommend to stop creating square footage to make more space if it is not necessary to the function of the home.

What is “fluff”? Fluff is square footage given to rooms and spaces that is not necessary to facilitate the function of the space. Creating a primary bedroom in a 2500 square foot house that is 17’ wide and 20’ deep creates large areas of the room that are not covered by furniture and function. A 5’- 0” wide walking path through a bedroom is not necessary. I recommend making the bedroom in a home design of that size be 14’-0” wide and 15’-0” deep and then taking some of the extra square footage and putting it into a larger and more functional primary bedroom closet. Fluff can also be additional hallways that are not necessary. We don’t live in our hallways. We live and function in the rooms off of them. A 5’-0” wide hallway traveling down a distance of 15’-0” to service one bedroom is a waste of materials and square footage. Being careful and mindful of how floorplans are created and square footage is distributed can lead to significant reductions in areas that buyers wont notice and will allow some of those square footage areas gained to be places into areas that they will desire and want. Multi function spaces can also help reduce the need for redundant spaces. In some design exercises our office is doing currently, we have been able to achieve reductions of square footage of 10-25 percent without reducing room count and bringing down the construction costs while achieving a much better laid out floorplan. Larger square footages can show up in sales prices as being better deals to buyers in some price points. We don’t recommend going “tiny” but recommend being more efficient and being near or right on target with competing product. Have your 2200 square foot home design offer more function and features than your competitors’ 2200 square foot home design. You want buyers to believe your home is bigger than what the actual square footage is. I enjoy asking potential buyers how big they think a home is that they have seen and hearing them say a number much higher than the actual square footage. I have toured homes that are a “tight 3000 square feet” and homes that are a “large feeling 3000 square feet”. Perception can be stronger than reality. If the home functions larger, buyers will see it as having more value. More efficient homes in terms of design and size also have lower heating costs and smaller mechanical systems.

I look forward to working with you in the future creating dynamic neighborhoods and desirable floorplans that buyers will crave. 2023 will be an opportunity to refine your product lines and follow trends that will continue for many years to come. Make a statement and make your product lines stand out in any market. My team’s success is making sure you are successful and giving you all of the tools to get the maximum sales price and your required market absorption. Please reach out if you have any questions.

Mike Johnson
Architect, AIA
Nash and Associates Architects