Midwest Experts Predict Residential Real Estate Trends for 2020January 8, 2020
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After a 2019 in which the Federal Reserve lowered interest rates three times, refinancing activity surged and home prices continued to rise while existing-home sales began to fall, real estate experts are looking ahead to 2020 with cautious optimism. The National Association of Realtors (NAR) is forecasting continued economic expansion and a stable housing market next year, with a 3.7% rise in existing home sales. Meanwhile, Dodge Data & Analytics predicts new-construction single-family housing starts to have a modest 3% decline.
“As the Fed continues to combat a slowing world economy, we anticipate that interest rates will remain low and the U.S. jobs market will stay strong, creating a conducive climate for homebuying next year,” said Paul Lueken, CEO of Draper and Kramer Mortgage Corp. “Loosened rules on FHA loans and pent-up demand from millennial homebuyers should also help usher in a bigger wave of first-time buyers in 2020 than what we saw in 2019.”
Against the backdrop of anticipated steady, yet relatively flat, market conditions, here are some of the trends expected to impact residential real estate in 2020, according to leading Midwest experts.
(Note: To go directly to the trend, please click on the headline below or scroll down for full write-ups. Click here for photos.)
- Gray is Passé and Black is Back
- Kondo’d Kitchens
- Proptech Packs a Punch
- Goldilocks Floor Plans
- Generation Renovation
- Foyer Frenzy
Gray is Passé and Black is Back
For years, gray has reigned supreme among designers and homeowners alike as a go-to neutral. But, according to a recent survey of professional interior designers by Sherwin-Williams, the color gray may be fading to black. When asked which colors they consider to be neutrals for 2020 and beyond, two-thirds of the designers surveyed said black.
At Lexington Village at Avondale, a community of 22 attached single-family homes on Chicago’s North Side, builder Lexington Homes recently unveiled a decorated model that’s a study in black and white. Not only does the model’s kitchen feature black-and-white tuxedo cabinets, but the master suite also plays into the color scheme with a black-and-white wallpaper ceiling treatment, black crown molding and a master bath showcasing white cabinetry with ebony quartz countertops.
“In doing our research, it felt like gray had been overdone – we wanted a model that looked fresh and inspiring with an urban sensibility,” said Jeff Benach, principal of Lexington Homes. “Similar to gray, a black-and-white color palette can work with almost any other shade for nice pops of color; plus, it’s gender neutral, so it appeals to everyone.”
“I won’t say gray will ever go away, but it doesn’t look as ‘new’ as black going into 2020,” said Elissa Morgante, founding partner of architecture and interior design firm Morgante Wilson Architects. “We’re seeing a trend toward more adventurous choices such as special dark, monochromatic and very saturated wall colors. Black certainly fits into that category, and it can be very dramatic, classic, casual or modern depending on how it’s used. There was a long period of time where people were intimidated by black or thought it was too goth, but that’s not the case anymore as they’ve seen – either through magazines, TV or the internet – how it can be used as a neutral to ground a space. We’re using it everywhere from whole rooms and accent walls to black-stained floors, cabinetry and trim.”
As busy homeowners try to simplify their lives, many are turning to principles espoused by tidying expert Marie Kondo – namely, that homeowners discard items that no longer “spark joy.” But some are taking Kondo’s mantra a step further, especially in the kitchen, where appliances are being concealed or, in some cases, removed entirely to achieve a more minimalist design in which less is more.
At Cirrus, a luxury condominium tower under construction along the lakefront in Chicago’s Lakeshore East neighborhood, developer Lendlease has taken into account that residents – particularly downsizers and second-home buyers – aren’t viewing the kitchen as a space that will host large holiday gatherings. For special occasions, they can simply invite guests to the tower’s 41st floor, which houses separate prep and demonstration kitchens, adjacent dining and seating areas, a wine cellar and tasting room, and east-facing balcony overlooking Lake Michigan.
“When planning the smaller kitchens at Cirrus, we eliminated the stand-alone microwave oven, opting for a speed oven/wall unit and also went with an integrated appliance package to strike a balance between functionality and design continuity,” said Linda Kozloski, creative design director at Lendlease. “In plans featuring open kitchen and living areas, buyers appreciate the simplicity so that the kitchen doesn’t detract from other areas of the home or, in the case of Cirrus, the sweeping lake and city views.”
But it’s not just condo owners who have an appetite for streamlined kitchen designs. They’ve become a common request in upscale single-family homes, too, according to Elissa Morgante, founding partner of Morgante Wilson Architects.
“There’s definitely a trend toward modern, cleaner looks, achieved through everything from concealed appliances to slab stone backsplashes,” said Morgante. “Even in homes where the kitchen itself is tucked away, there’s a desire to remove unnecessary visual clutter so that it’s a more inviting space.”
Belgravia Group achieves an uncluttered look in its open-concept kitchens through thoughtful consideration of not only clean lines and functional layouts, but also finishes. For example, one of the developer’s most popular kitchen cabinetry options at Renelle on the River and Three Sixty West, two new luxury condominium developments from Belgravia located in downtown Chicago, features an opaque glass finish in a lighter neutral that brightens the space and pairs well with popular neutral wall colors, creating a monochromatic look that is inviting and emphasizes the openness of the space. In the spirit of sparking joy, the finish is also exceptionally easy to clean.
“As part of the living and entertaining space, Belgravia kitchens are quietly elegant and avoid creating a visual distraction from the gracious rooms and high-rise views that are the focal point of homes at Renelle on the River and Three Sixty West,” said Liz Brooks, vice president of sales and marketing for Belgravia Group. “Many of our buyers choose our condominium homes as an alternative to single-family living and still want the kitchen to serve as the heart of the home. The clean look of our kitchens unifies the space, making it a restful oasis, whether filled with family for the holidays or during a quiet Sunday morning with coffee.”
Proptech Packs a Punch
With app-savvy millennials representing the largest generation of homebuyers, according to the National Association of Realtors 2019 Home Buyers and Sellers Generational Trends Report, many brokerage and financial services firms are entering the proptech residential space by creating their own proprietary apps or new technology to make the process of buying, selling and financing a home easier and more mobile for clients and agents in 2020.
“The millennial generation is the first wave of homebuyers who, as digital natives, expect to review all details of the buying/selling transaction from their phone,” said David Garside, executive vice present of title and escrow operations at Proper Title LLC. “In fact, traditional paper methods by lenders, Realtors and title companies have been streamlined to adapt to the digital trend and a new generation of buyers.”
To better serve tech-fluent clients in 2020, Proper Title utilizes a proprietary Net Sheet Tool that real estate agents can use to quickly give homebuyers an accurate breakdown of closing costs, helping them better anticipate and prepare for the funds they’ll need to bring to the closing table or expected proceeds from the sale.
“The sea of available online data can be overwhelming for consumers, and there’s only going to be more of it,” said Laura Ellis, president of residential sales and executive vice president of Baird & Warner, Illinois’ largest family-owned independent brokerage. “So, embracing proptech to create new tools that help buyers and sellers cut through some of that noise is a natural extension of our services.”
Through a new partnership with Buyside, Baird & Warner has launched a website feature that will instantaneously connect sellers with real-time market data specific to their home. Using this information, existing owners can more easily pinpoint the ideal time to put their home on the market. Available insights include as many as three real-time estimates and buyer heat maps to gauge market demand based on recent sales activity and how many buyers are searching in a similar price range within the area.
Goldilocks Floor Plans
Buyers who have been saying “too big” or “too small” in recent years are finding their “just right” in 2020 thanks to a greater variety of innovative floor plans being offered by homebuilders and multifamily developers.
At Cirrus, a 47-story, 363-unit luxury condominium tower in downtown Chicago, buyers can choose from one-, two-, three-, and four-bedroom condos, as well as townhome and penthouse residences. The homes range in size from 650 to over 3,000 square feet and are priced from the mid-$400,000s to over $4 million.
“We programmed smaller plans into our unit mix because, during this housing cycle, virtually all of the new construction has been larger units at higher price points,” said Ted Weldon, executive general manager at Lendlease “Yet we’ve seen that even among buyers who can afford a three- or four-bedroom condo, some don’t necessarily want that much space. At Cirrus, we’re able to accommodate those in search of a full-time residence in a prime lakefront location, as well as those who need only one bedroom, whether they’re downsizing from a single-family home, trading up from an apartment, or simply looking for a second home in the city.”
Buyers seeking the privacy, square footage and neighborhood location of a single-family home, but without the upkeep, are finding new maintenance-free options in developments like Lexington Village at Avondale. The community of 22 attached single-family homes in Chicago’s Avondale neighborhood offers a brand new “hybrid” concept created by builder Lexington Homes. Measuring 2,300 to 2,450 square feet, plans combine elements of townhome and single-family home design, with three levels of living space plus a rooftop deck, as well as a fenced-in back yard and detached two-car garage.
“These three- to four-bedroom homes have features you won’t find in a typical city residence, such as two private outdoor spaces – one with grass at ground level, and another higher up that offers skyline views,” said Jeff Benach, principal of Lexington Homes. “Plus, the homes have generous rooms on each level, including several large bedroom suites with oversized baths and walk-in closets.”
More traditional detached single-family homes are evolving, too. Builder Red Seal Homes recently introduced a new product line, The Chateaux, at Provenance, its community of single-family homes, duplexes and townhomes in the Northbrook area of Cook County, Ill. Smaller than the community’s existing single-family home plans, The Chateaux is available in both ranch and two-story designs, with the capacity to range from 2,217 to 3,606 square feet.
“The Chateaux combines the convenience of maintenance-free living with the footprint of a single-family home,” said Brian Hoffman, an executive with Red Seal Homes. “Buyers have the ability to choose from two versatile plans – a two-bedroom, 2½-bath option that places everything on one level, or a three-bedroom, 2½-bath design in which the master bedroom and two guest bedrooms are housed on the second level. This makes The Chateaux an attractive option for buyers in various stages of life, and with varying needs in terms of space and accessibility.”
With home sales slowing in many parts of the country, a new niche has emerged: firms offering light renovation services to help sellers achieve their best sale price before listing their home.
Leading this charge is Renovation Sells, Chicago’s presale home renovation expert that works alongside Realtors and homeowners in making minor renovations for major ROI. “In today’s market, most buyers want a turnkey home that’s Instagram-worthy, but sellers often struggle with what that looks like. Knowing what to do first is the biggest challenge for sellers – and Renovation Sells aims to simplify that process,” said Michael Valente, managing partner for Renovation Sells. “We are a design-focused, all-in-one resource that can deliver the look that makes the best first impression with buyers, both online and in person, ultimately resulting in quicker and higher-priced home sales.”
According to Valente, the firm’s average project takes 21 days, costs around $20,000 and sells within 28 days of being on the market.
In agreement that light renovations can make a big difference – and be a big business in 2020 – is Ben Creamer, co-founder and managing broker of Downtown Realty Co., a brokerage firm specializing in luxury rental and for-sale residences in downtown Chicago. “Usually, our first advice to sellers is to repaint in a neutral color,” Creamer said. “But kitchen updates, like adding a backsplash or switching out countertops, can pay the biggest dividends, reducing market time and resulting in a higher price. Unless a seller is super handy, those high-return projects typically require a contractor to get it done right.”
Baird & Warner, Illinois’ largest family-owned independent real estate services company, is also used to making renovation suggestions to its sellers to produce the best offer possible. As the firm saw a general increase in market times across Chicagoland in 2019, it decided to offer its clients the services of renovate-to-sell firm Curbio Inc.
“All homeowners want to know which renovations will bring them the highest ROI, so we’re excited to offer our agents and clients access to a national expert like Curbio,” said John Matthews, senior vice president of residential sales at Baird & Warner. “Our sellers especially like that Curbio makes the process easier by deferring payment until the home is sold and providing real-time photo, text, and video updates of the renovation via an app. If there’s a way to help our agents sell more homes in 2020, and for our clients to meet their sales objectives, then we’re going to pursue it.”
The average entry foyer measures just 86 square feet, or 3% of the space in a typical new home, according to a recent study from the National Association of Home Builders. Historically more utilitarian than opulent, foyer designs are changing as developers and homebuilders – and discerning buyers – look to create that all-important first impression.
In condominiums developed by Belgravia Group, foyers not only serve as a point of entry, but also highlight other features of the home’s design. For example, at Renelle on the River, Belgravia’s 50-unit luxury condominium in Chicago’s River North neighborhood, one plan situates the foyer to showcase stunning views of the famous Wrigley Building and Michigan Avenue. In others, Belgravia allocates space for wall art and additional statement pieces.
“The foyer is often overlooked in condominium design, but it is one of the most important elements of a floor plan because it evokes a grand sense of arrival,” said Liz Brooks, vice president of sales and marketing for Belgravia Group. “Buyers, especially those opting for a condominium in lieu of a single-family home, appreciate having a dedicated entryway that allows for a more graceful, defined transition to the rest of the home.”
In a customized 3,000-square-foot condominium home at Optima Kierland, a development of ultra-luxury rental and for-sale residences in Scottsdale, Ariz., the foyer sets the stage for a “wow” moment that awaits in the adjacent living area. Scottsdale design firm Est Est selected a dark textured wall covering to create a warm, intimate entryway that leads to the home’s bright living area, where expanses of windows frame the Scottsdale landscape.
“Something unique about Optima is that we allow near-complete customization for our condo buyers, so residents of our for-sale communities can create a home that suits their individual needs and reflects their design preferences – with the foyer often the first focal point, many residents choose to make it their own.” said David Hovey Jr., president and principal architect of Optima Inc., which designed and developed Optima Kierland.
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