Markets like green and smart home technology dominated this year and continue to grow
By SERGIO FLORES
It’s almost a wrap. With one last month remaining for 2017, it’s incredible to see just how far the industry has come: What came true from January’s 2017 forecast; what we were totally wrong about; and now what’s in store for the new year.
Let’s start off with some good news. Despite home prices being at all-time highs in many markets nationwide, builder confidence remains high. “November’s builder confidence reading is close to a post-recession high — a strong indicator that the housing market continues to grow steadily,” said NAHB Chairman Granger MacDonald, a homebuilder and developer from Kerrville, Texas. “However, our members still face supply-side constraints, such as lot and labor shortages and ongoing building material price increases.”
To what can we attribute such high builder confidence? For starters, the economy seems to be doing quite well. From July to September, the US economy grew at a three percent annual rate, according to the Commerce Department. It’s remarkable to see such high numbers in builder confidence and a growth despite the fact that Texas, Florida and Puerto Rico saw some of their worst natural disasters in history. Economists only surmised a 2.5 percent increase because of the hurricanes, but that was proudly proved wrong.
“Demand for housing is increasing at a consistent pace, driven by job and economic growth, rising homeownership rates and limited housing inventory,” said NAHB Chief Economist, Robert Dietz. “With these economic fundamentals in place, we should see continued upward movement of the single-family housing market as we close out 2017.”
2017 also saw more smart home tech being integrated into new home developments. In August, Brookfield Residential partnered with Apple to create a new type of residential development: a smart-home community. The Collection, a new development in Brookfield’s Playa Vista in Los Angeles, is comprised of 66 homes that have smart home technology integrated into the community’s core. HomeKit, Apple’s Siri-equipped smart home system, is integrated into each of these homes. Through an app, HomeKit allows homeowners to control their connected products from Wi-Fi to lights, to thermostats This feature isn’t an upgrade, but a standard.
Apple’s partnership with a top homebuilder in the country is paving the way for smart home developments across the nation. It’s not just Apple, though. In Alexandria, Va, Brookfield Residential introduced its latest innovative new home project, The Smart Home powered by Amazon Alexa. Built in close collaboration with Amazon, the Smart Home integrates voice-enabled automation to help homeowners facilitate daily tasks through Amazon’s best-selling Alexa platform. The model home is located in the popular Avendale community in Northern Virginia and is open for tours. The goal is to demonstrate how technology can ameliorate homeowner’s lives and offer effortless convenience.
If we’re learning anything from technology, it’s that it is here to stay—and for a reason. The way of living is rapidly changing, and builders should be keeping Smart Homes in mind when developing new projects. Consumers are asking for it, and as Millennials begin to enter the housing market, you can guarantee a smart project will be on their lists of demand. “This is exciting now, but pretty soon, smart homes will be standard,” said Adrian Foley, chief operating officer of Brookfield. “To stay ahead of the competition, we’re going to keep layering on new technology.”
Speaking of “novelties,” energy-efficient and sustainable construction saw significant strides this year as well. A recent report conducted by Dodge Data & Analytics with NAHB explored the rapidly growing green construction activity among single family and multifamily home builders in ‘Green Multifamily and Single Family Homes 2017’ (available for download at www. nahb.org/SMR). According to the report, ‘At least one third of single family and multifamily builders who were surveyed said that green building is a significant portion of their overall activity (more than 60 percent of their portfolio). By 2022, this number should increase to nearly one half in both the single family and multifamily sectors. Within this group, nearly 30 percent of multifamily builders fall into the category of “dedicated” green builders (more than 90 percent of their portfolio). On the single family side, the percentage of “dedicated” green builders are nearly 20 percent, but that share is expected to grow sizably by 2022.”
Niche markets like green and smart homes are proving themselves to not only be coveted by buyers, but integral to new home developments. These markets are bound to only grow in the coming years, so pay attention now.
Sergio Flores is Senior Editor for Builder and Developer magazine. He may be reached at email@example.com.