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Moving forward after 2020.
As we put 2020 behind, it’s hard to hazard a guess what 2021 will hold for the construction and housing industry. Unprecedented times make for challenging forecasts, and the widely varying circumstances from one area to another further complicate those predictions.
We spoke to leaders of two state associations to get a sense of the local, state, and national markets to help put 2020 in perspective—and maybe provide a better vision for the coming season.
The Des Moines metro area may have suffered a variety of consequences as a result of the COVID-19 pandemic, but a slowdown in home sales was not one of them.
“Average home prices were at an all-time high, and days on market and inventory were both at all-time lows,” says Gavin Blair, CEO of the Iowa Association of REALTORS®. “If you were a member who had been active in real estate in the past few years, you probably had one of your best years ever.”
Jay Iverson, Executive Officer of the Home Builders Association of Iowa (HBA Iowa), echoes that. “Des Moines metro home construction and sales were really strong,” he says. “Across the board, remodelers and builders are busy at all price points. There’s no sign of it slowing down either if interest rates remain low and product availability increases.”
Iverson says most local builders are booked well into 2021. “If we could obtain all the materials needed, we’d have unlimited work. Some of the issues are COVID-related because of manufacturing or supply chain delays. But some of it is just supply and demand. The market is so busy, suppliers can’t keep up.”
“The biggest challenge is finding property to buy. The only downside to the hot market is the lack of inventory,” Blair says.
Like Iverson, Blair doesn’t expect the market to slow next year. “The National Association of REALTORS® predicted Des Moines would be one of the top-ten markets in the country postpandemic,” Blair says. “So I expect housing prices in the metro to remain strong.”
Real estate markets across the state remained steady or improved throughout the past year, according to Blair, typically reflecting their local economies. “Our membership is at an all-time high statewide,” he says. “That’s partly a result of unemployment in other industries. People who lost jobs took the opportunity to get their real estate licenses. The markets have been strong, so it made that a good move for a lot of new licensees.”
Iverson adds that statewide the home construction market has been a little leaner than in the metro. “There’s a lot of work in most metro areas, especially remodeling,” he says. “But rural areas are slower, often because it’s hard to find someone to do the work. There are just fewer builders and remodelers in those rural areas.”
Blair says inventory remains an issue statewide, not just in the metro. “That’s especially true with affordable new construction. The margins just aren’t there for builders, so the inventory can’t keep up with demand.”
This will continue to be an issue if growth predictions hold true.
Both Iverson and Blair say that markets across the country tend to reflect the effects of the pandemic and the extent of lockdown measures put in place.
“Areas that were completely locked down or locked down longer were harder hit, and the builders there are struggling compared to here,” says Iverson.
Blair says, “The U.S. has seen spikes in some areas, and Iowa is one of those. We have a strong market while other Midwest states like Michigan and Ohio are down, areas that had stricter COVID restrictions imposed.”
“Michigan and a lot of areas on the East Coast had economies much harder hit, and that’s affecting construction activity, home prices, and all aspects of the market,” Iverson says. “But areas where people are relocating are seeing unbelievable growth, like Texas and Florida. And Iowa is seeing that, too.”
“We’re already one of the top-ten states for home buyers migrating from one state to another,” says Blair. “As economies in other states struggle, that’s just going to continue.”
Moving forward, the REALTORS® association plans to continue offering educational programs and resources via remote access. “We’re really proud of what we’ve been able to do so quickly,” he says. “We were one of the first chapters in the country to provide remote education access across the state when restrictions were instituted in the spring.”
He says the association hopes to have staff back in the office working on-site again in January, but face-to-face membership activities will remain virtual a bit longer. “We anticipate in-person classes beginning again in the summer, once there’s widespread availability of the vaccine,” he says. “Some of our annual events, like the legislative conference we hold each winter, will be held remotely until then.”
HBA Iowa plans to hold most of its Iowa meetings in person in 2021 as it was able to do for much of 2020. “Quite a few of the membership meetings and activities—golf outings, motorcycle rallies, candidate forums—were held in person this past year with proper CDC protocols in place,” Iverson says.
He says many of the local associations recently announced plans to hold their home shows virtually this year. “They’re typically held in the winter or early spring, and it will be interesting to see how those plans come together. The same holds true for the giant International Builders Show, which normally hosts over 80,000 participants from all over the world. That will be held virtually in February.”
The past year may have broken records in nearly every category imaginable, but most Iowans would just as soon take a pass rather than repeat the challenges that came with those numbers. As the recent saying goes, “Let’s get back to precedented times.”
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Emerging trends in kitchen lighting, color schemes and ways that the COVID-19 pandemic is shaping the future of home design.
- The Multi-Zone Kitchen. A traditional three-zone “work triangle” setup in the kitchen creates an efficient connection between the fridge, sink and range. But many homeowners want their kitchens to emphasize a variety of other tasks and allow for other cooks as well. In response, homeowners are working with designers on Houzz to add more touch points to that triangle shape and create additional work zones. This “work trapezoid” might include dedicated areas for baking, prepping and chopping, or separate stations for snacks, drinks or homework.
- Stylish Sconce Lighting. Lighting can be like jewelry in a kitchen, and homeowners on Houzz are showing interest in swing-arm and other sconce fixtures, which can add some adornment while providing needed task lighting around a sink or range. A sconce also brings in a sculptural element above eye level and adds a bit of shimmer from its metal finish, two details that can help break up walls of cabinets or tile. Plus, a swing-arm sconce is a good solution for adding accent lighting to open shelves to highlight objects on display.
- The Rejuvenating Bathroom. With the right features, a bathroom can help reduce stress. In fact, two in five homeowners (41%) who renovated a master bathroom say they rely on their new space for rest and relaxation, according to the recent 2020 Houzz Bathroom Trends Study. A soak in the tub or a long hot shower usually does the trick, but some homeowners are rejuvenating with steam showers, aromatherapy shower heads and bathtub fillers that can hold a cup of tea or glass of wine.
- Oversize Rectangle Tile. There are a lot of reasons to consider large rectangular tiles in a bathroom. Fewer grout lines means less cleaning and less visual clutter. Plus, the large-format tile can help visually expand a small space. We’re seeing large tiles used in a variety of classic patterns, such as herringbone, stacked and brick. If you’re considering large rectangle tiles for the bathroom floor, professionals on Houzz recommend going with a matte finish, which provides some slip resistance.
- Browns and Beiges Bounce Back. In conversations with designers and builders on Houzz, a trend that came up again and again was a renewed interest in shades of brown. Warm taupes, beiges, sands — basically any earth tone is surging in popularity. Some designers say the trend is an evolution from popular whites and grays of recent years, and that brown as an accent color works well to bring warmth to a palette heavy with those colors.
- Hardworking Home Offices and Nooks. This year, many of us discovered just how functional our homes really are as family members of all ages sought out productive spaces for remote work, video meetings, schoolwork and other tasks that previously took place away from home. This trend of remote work will continue in 2021 and homeowners will double-down on creating efficient dedicated offices, work nooks and backyard cottages.
- Video Conference-Worthy Backgrounds. This year, many people found themselves crafting aesthetically pleasing backgrounds for video meetings. Through the help of Houzz inspiration photos and pros from the Houzz community, homeowners have discovered the art of a good vignette. Well-hung artwork, pops of color, good lighting, a little greenery and objects of different sizes can create a stylish backdrop for a meeting, but also make our homes more enjoyable to be in.
- Rethinking the Open Plan. Perhaps no other design element was put under the microscope this year more than the open plan. Anyone who had multiple family members attempting concurring video meetings in an open layout quickly saw the disadvantages to a lack of walls. The open plan isn’t going away for everyone, but many people are considering sliding doors or partitions that can close off rooms for much-needed privacy.
- The Year of the Pergola. Homeowners on Houzz are looking to extend usable living space to outdoor areas. If you want to create an inviting outdoor living space, you’ll likely need shade to do it. And a pergola is a relatively quick and affordable solution. These simple shade structures, which can be built and installed in a day or two, provide adequate shade for dining, lounging and other outdoor activities.
- Rise of the ADU & Backyard Cottage. As mentioned, many people who found themselves in households of competing video meetings and school activities desperately sought private space to work, exercise or relax. In fact, a recent Houzz study found that one in eight homeowners felt their home lacked a dedicated work space or exercising area (13% and 12%, respectively). A backyard cottage or accessory dwelling unit (ADU) is a great solution for adding that kind of dedicated space. These standalone structures are used as home offices, gyms, meditation areas or as extended living spaces to house relatives or kids who had to stay home from college due to the pandemic.
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Woodharbor Kitchen & Bath relocation brings exciting new opportunities.
If there’s anything positive to say about 2020, you have to acknowledge that the uncertainty has forced many people to take a step back and reevaluate priorities.
The same is true in business.
When Greg and Cheryl Arganbright, owners of Woodharbor Kitchen & Bath in Urbandale, began contemplating a new location for their cabinetry and remodeling business last spring, they weren’t anticipating a national pandemic would interrupt those plans. “Our lease was ending at the end of July. So in the spring we started making plans to move into a brand-new building and expand our space,” Greg says.
But when the quarantine began having an effect on so many businesses and individuals, the Arganbrights decided to take a step back and reevaluate their options. “We put the brakes on the move at first while we waited to see how things would go,” Greg says. “But our lease was still coming up, and we had to do something. So we started looking for a temporary location while we finalized our plans.”
While touring properties in search of that “temporary location,” the Arganbrights found the answer they needed. And in a year when nothing seems to go right, the pieces all came together smoothly. Greg says, “We walked in here thinking it might be a good temporary location while we customized another location. But as we stood here looking at it, we realized it met all the criteria we were looking for.” Those criteria included office space for them and their design team, a smaller showroom area, and a larger warehouse space.
As the industry has changed over the past few years, more shops are moving toward boutique-style showrooms to highlight new products and finishes. With the anticipated move, the Arganbrights decided to update their approach to the showroom, plus the displays in it. “We moved a couple of the displays,” says Cheryl. “But we created some new ones to highlight unique cabinetry colors and backsplashes. We also made a point of including nearly every option available for storage.” Every drawer and cupboard is a demonstration of the myriad storage options available at Woodharbor, from spice and utensil units to those designed especially for pots, dishes, and more.
The new space already had office space laid out, but the Arganbrights opted for some changes there as well. “We took out the wall and doors dividing the front offices from the showroom,” explains Cheryl. “And we chose different cabinet finishes for each of those offices, too, so customers could get another chance to see some of the different options available.”
One of the key motivations for the move was to increase warehouse space, and the new location has opened up numerous possibilities. “We have so much more space here than in the old space,” Cheryl says.
Greg adds, “It’s going to be wonderful during the colder weather to have all that space for our team to do assembly and installation. In good weather we can just unload and assemble right in the driveway of the home, but that’s not possible in the winter. Now we have all this great space to work.”
The couple has been discussing ways to put that added square footage to use in other ways as well. Greg says, “With a larger warehouse and a dock for shipping and receiving, we can add more products and services for our kitchen and bath customers. We’re still considering what those products and services might be to best meet their needs.”
In addition to the typical cabinetry and hardware samples, Cheryl says a variety of other products in the showroom demonstrate the other areas of Woodharbor’s remodeling work. “We have flooring, backsplash samples, and paint and finish displays for the cabinetry,” she says. “Right now we have several kitchen displays and bath cabinetry displays.
“We’re also talking about setting up a display to show how a home can be adapted for aging in place. That’s a growing market, and a lot of our clients are looking for that. In the Urbandale community, around our new location, so many of the homeowners are in that situation. They’ve been in their home for a while, and they don’t want to leave their neighborhood, but they need to make some changes in order to stay there long-term.”
In some ways, that’s exactly what the Arganbrights did when they relocated the Woodharbor offices to the new Urbandale site. Greg and Cheryl were looking to stay in the area, wanted to make their space work for their changing professional lives, and anticipated remaining in this new space for many years.
Rethinking their move allowed them to achieve all those goals. The pandemic may have forced them to pause and take a step back at first, but it also gave them the opportunity to really make a significant leap forward.
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The Houzz 2020 Bathroom Trends Study reveals popular features, styles and colors.
An old or outdated space is by far the leading pet peeve for homeowners prior to a master bathroom renovation (69 percent, up from 59 percent in 2019), according to the 2020 U.S. Houzz Bathroom Trends Study. The survey of nearly 1,600 U.S. homeowners using Houzz who are in the midst of, are planning, or recently completed a master bathroom renovation, found that nearly nine in ten renovating homeowners change the style of their master bathrooms as one way to bring it up to date (89 percent), with modern leading the way (20 percent), followed by transitional and contemporary (18 percent, each).
Insufficient storage, small showers, poor lighting and limited counter space are among homeowners’ other leading grievances (34, 34, 29 and 25 percent, respectively). These coincide with the features most often upgraded during a master bathroom renovation including showers, light fixtures, countertops and vanity cabinets (83, 80, 79 and 74 percent, respectively). To address small showers, a majority of homeowners renovating their master bathrooms are increasing the size of their showers (54 percent), more than twice as many as those choosing to increase their bathroom’s overall size (20 percent).
“We’re seeing that spending so much time at home is bringing a functional, beautiful bathroom to the top of the priority list for many homeowners,” said Liza Hausman, Houzz vice president of Industry Marketing. “They’re enlisting home professionals to bring bathrooms up to date with more current styles, and upgraded features like storage and lighting.”
More than four in five homeowners hired a professional to help with their master bathroom project (82 percent). General contractors were enlisted most often (43 percent), though renovating homeowners also hire specialists including bathroom remodelers and bathroom designers (20 and 12 percent, respectively).
Bathroom renovations continue to command significant investment, with homeowners undergoing a major remodel, including a shower update, spending three times more than those doing minor remodels and leaving the shower as is (median spend of $14,000 versus $4,500). Bathroom size also impacts budget. Homeowners who remodel a master bathroom larger than 100 square feet have a median spend of $7,000 more than those with a bathroom smaller than 100 square feet ($17,000 versus $10,000, respectively). That said, the median national spend on master bathroom remodels is $8,000.
Other bathroom trends from the study include:
- Light and Bright: White continues to be the top choice in master bathroom colors, with more than half of homeowners choosing white countertops (51 percent) and a significant portion opting for white walls both inside and outside of the shower (45 and 32 percent, respectively).
- Surface Material Distinguishes Accent Walls: More than a third of homeowners add or upgrade an accent wall during a master bathroom renovation (37 percent). Top colors include white (23 percent, up from 15 percent in 2019), followed by gray (21 percent) and blue (19 percent). Many use surface material to distinguish accent walls (51 percent, up seven percentage points from 2019), while standout color, pattern, and texture are also popular (45, 41 and 28 percent, respectively).
- Customized, Built-in and Floating Vanities Abound: Of the three quarters of renovating homeowners who upgrade their vanity (74 percent), the majority choose to go with custom or semi-custom options (36 and 21 percent, respectively). Vanities are twice as likely to be built-in as opposed to freestanding (56 versus 28 percent, respectively), and floating vanities are growing in popularity (15 percent in 2020 versus 11 percent in 2019).
- Lighting Features are Key: Among the eight in 10 renovating homeowners who update light fixtures during their master bathroom renovation, wall lights and recessed lights remain the favorites (58 and 55 percent, respectively), followed by lighted mirrors and pendant lights (17 and 15 percent, respectively). Six percent install under-cabinet lights, likely tied to the popularity of floating vanities.
- Installing Many Lit Mirrors: Of the three in four homeowners who install new mirrors during a master bathroom renovation (77 percent), more than half install two or more mirrors (62 percent). The percentage of renovators installing three or more mirrors is growing (10 percent, compared with seven percent in 2019). One in five renovators are also installing LED lighting in their mirrors, a significant increase from 2019 (20 versus 14 percent, respectively).
- Touch-Free Features On the Rise: Nearly half of all new faucets and one-third of toilets (48 and 34 percent, respectively) include high-tech features. Water efficiency is the leading faucet technology (28 percent), but a growing percentage of faucets offer touch-only or touch-free activation (five percent, up two percentage points from 2019). Nearly one in five homeowners who upgrade their toilet add a seat with a bidet (17 percent), up four percentage points from 2019.
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Local professionals talk about the year so far and the year ahead.
Last year about this time, we published our annual “predictions for the year ahead” story with perspectives from several developers in the Des Moines metro area (see BUILD Des Moines, January 2020). No one predicted that, just a few weeks later, the country—and the world—would be in lockdown due to a worldwide pandemic.
Just as surprising, last year’s predictions weren’t far off the mark, despite the roller-coaster ride of the past 12 months. Here’s what some local professionals have to say about getting through 2020.
Lots and land
Although many builders had predicted that lot availability would continue to be a problem in 2020, few expected the boom that’s taken place over the past nine months. Early in the spring, as builders would normally have been ramping up their projects, the coronavirus quarantine seemed to warn of dark days ahead.
“Nobody thought at that point that the strong start to the year would hang on,” says Eric Grubb of Solid Ground in Clive. “But the market got even better.”
Kimberley Development’s Jenna Kimberley says, “We still don’t have enough lots to meet the demand. I think the last forecast I read indicated that we were about 2,000 units short [by early October].”
Hubbell’s Rachel Flint says, “Honestly, the market is really good right now. The Des Moines area is fortunate because most communities are not locked in. They have room to grow if sellers aren’t holding on [to their outlying land].”
The hot market in Des Moines does mean lots seem always to be in greater demand than inventory, and the unpredictable economic situation this year hasn’t changed that. “All of a sudden, bulk sales are going strong,” says Kalen Ludwig of Peoples Company. “Momentum is growing as interest grows from buyers wanting to relocate to Iowa.”
In fact, Ludwig says activity at Peoples Company didn’t slow down at all despite the restrictions from the virus. “Unlike some others, we didn’t slow down development plans,” she says. The company kept a close eye on the market and buyer activity and continued with its original forecast. “There’s so much activity right now, especially in communities like Norwalk and Indianola.”
Accurate Development’s Kevin Johnson says, “With interest rates so low, sales are good at all price ranges. At this point, everyone is rushing to get lots in the ground that they’d put off earlier in the year.”
The virus may not have slowed home sales, but its effects have been felt in the construction industry nonetheless.
“Supply chain issues are 10 times worse than expected,” Johnson says. Last spring, he predicted that builders would soon have issues obtaining product as a result of factory shutdowns and trade barriers. “Everything is affected. Lumber, appliances, siding, nails, interior doors—it’s at the point that we have to have homeowners’ final selections on everything when we start framing.”
Flint says one of the difficulties with the supply issues is how far-reaching they are.
“Anything manufactured was hit by COVID with supply chain issues,” she says. “It’s industrywide, but it’s sporadic,” so scheduling and predicting lead times is a moving target.
Kimberley says the construction industry has certainly been affected by these delays, although supply concerns have been less of an issue on the development side. “We’re definitely seeing effects from COVID,” she says. “The typical development timeline is getting longer because it’s harder to get paperwork done and get approvals and appointments with city reps.”
Ludwig says, “During the slight slowdown early in the spring, home prices were a little more competitive. But when the market stayed strong, and everyone knew lumber prices were going to go up, some builders started including that margin already.”
Since then, home prices have risen slightly, according to Grubb. “Lot and land pricing are about the same, but homes are starting to go up,” he says. “Especially with lumber prices rising,” builders are starting to take that into account.
With interest rates as low as they are, and no indication that they’ll rise in the immediate future, area builders and developers say prices will remain strong.
Each of the professionals we spoke to was cautiously optimistic about the coming year. “Cautious” is the operative word.
“There’s always uncertainty with an election year,” Kimberley says. “But in the near term, things are really better than we would have expected nine months ago. Compared to this time last year, Kimberley Development has almost double the closings.” She adds that the company has diversified its offerings in the past couple of years, which helped put it in a position to weather this year’s uncertainty. And the “crazy sales” have made for a strong year overall.
Grubb agrees. “We’re happy with where we’re ending the year, especially in light of what everyone thought when the quarantine first happened.”
“Our 2020 results for Accurate are right on target, especially based on predictions in the spring,” says Johnson. “We didn’t put a lot of inventory in the ground, but we’ve sold out. Things have been hot enough we sold our model home.”
Ludwig says Groundbreaker Homes has seen outstanding sales this year as well. “We typically sell about 15 homes a year. We had 30 pending or sold homes by the end of October,” she says. “We were ramping up our projects already, but the market has been strong and helped us with that.”
Flint says the lower price point homes remain in demand and will continue strong in 2021. “The single-family home market under $280,000 is still in higher demand and may be even more in the year ahead if supply issues remain a concern,” she says.
“Predictions are always difficult, but that’s especially true this year. If rates are low and construction costs level out, 2021 could be a good year. If that doesn’t happen, it’s anybody’s guess,” Grubb says.
Johnson says interest rates will be the real indicator. “If rates stay below 3%, there’s no reason for the market to slow. If they get as high as 6%, that’s a different story.”
“I’m not nervous for the next few years,” Ludwig concludes. “But in five to seven years, what if interest rates rise? All these buyers who are able to get into homes now, when they’re ready to move up, will they be able to afford it?”
These professionals are facing the year ahead with optimism. But whatever 2021 holds, it’s the “cautious” in their optimism that will continue to get them through it.
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