How Builders Can Retool Home Designs in an Uncertain Housing Market

Price reductions, incentives, cancellation rates — many of us have been here before. And while it’s still uncertain how the market will look in the next one to two years, many economists think housing is in the middle of a correction instead of a crash.

Builders that are agile and respond to buyers’ needs while adjusting their KPIs will be better positioned to withstand a turbulent market. Industry veterans and newcomers alike can arm themselves with a particular lesson learned from previous market cycles. Retooling efforts should include your home plan portfolio as well as improving cash flows and business systems to remain competitive.

Why Updating House Plans Now Is a Good Idea

In the frenzied real estate markets of 2020 and 2021, builders couldn’t build quickly enough. Buyers were lining up (oftentimes literally) to buy a new home. Waiting lists and lotteries were back from the heydays of the early 2000s full of people who simply wanted to get into a home, any home.

Now the trifecta of rising home prices, interest rates, and inflation has caused the market to shift and builders must compete for a smaller pool of buyers. They are more selective and can take their time evaluating home plans and communities. Some builders are adjusting prices and offering incentives with varying levels of success — these pivots will usually appeal to those buyers for whom price is the primary driver.

But what about the other buyers waiting on the sidelines? Another way builders can set themselves apart from the tightening competition is through architecture and home design. Updating your house plans is a win-win for you and your buyers in a few ways:

  • Offers buyers features they can’t get anywhere else in the area
  • Diversifies your house plan portfolio to meet buyers’ evolving needs
  • Potentially reduces your building costs
  • May improve house affordability

When a buyer is trying to decide whether to buy from you or your competition down the road, they are looking at location, base price, upgrades, builder reputation, and incentives, to name a few. When everything is similar, the home’s architecture and floor plan is the next logical differentiator. In other words, in a buyer’s market, design sells.

Best Practices on Refreshing House Plans

Buyer preferences are always a moving target. They’re constantly changing in response to various socioeconomic factors and regional differences. But it’s becoming increasingly clear we are in the midst of a housing reset that includes affordability and the way people want to live in their new homes.

Now is an ideal time to evaluate your plan portfolio, understand what’s working and what isn’t for your market, and make the necessary adjustments to remain competitive. Here are a few ways to approach making updates to your house plans.

Add a Stand-Out Feature

Differentiate your home portfolio from the competition and resale with features buyers can’t find anywhere else. An “I deserve it” feature offers comfort and luxury, like a spacious spa-inspired primary bathroom with a walk-in shower.

Features that address a buyer need or solve a problem are also good candidates to add to existing house plans. With more households expanding to include extended family, accessory dwelling units and multi-gen suites are becoming more popular. Mudrooms keep dirt and clutter from creeping into a home’s living spaces – they’re useful in homes of all sizes, and adding them to your plans could set your company apart from everything else available in the area.

Augment the Elevations

Sometimes, all that’s needed is a tweak in the packaging. Architectural trends and preferences shift, and refreshing your homes’ elevations to respond to these changes is always a good idea.

A few characteristics to consider:

  • Regional architecture
  • Color palettes
  • Window size and placement
  • Front door styles and colors

It is also an opportunity to put a refreshing twist on oversaturated styles. It seems nearly every builder has a modern farmhouse elevation in their portfolio – think about how yours can stand out from the crowd.

Evaluate Your Greatist Hits

Your company has its bestsellers, and the prevailing philosophy is to leave them alone: If it ain’t broke, don’t fix it. But perhaps now is the time to give them a closer look, especially if they are some of your more expensive plans. Your architect may be able to make adjustments to reduce the cost to build while keeping the features that make it popular with your buyers.

Consider Spaces That Are Expensive to Build

Kitchens, primary bedrooms and baths, and laundry rooms cost the most to build, on average. But kitchens and bathrooms also drive new home sales, so it’s not about removing features that appeal to buyers. Rather, re-thinking these spaces should focus on exploring ways to improve their organization in a way that allows you to reduce their square footage requirements.

For example, oversized center islands are a desirable feature in kitchens. Perhaps a 12’ x 5’ size can be reduced, or maybe it’s a matter of keeping the island dimensions the same and removing the separate dining area.

Our redline of a client’s main-level house plan simplifies the design while maintaining the overall layout and functionality.

  • Updating the framing at the mudroom reduces some framing challenges, removes outdated angled walls, and creates more room for a bench area.
  • Changing the kitchen island to a simple shape provides material and labor cost savings.
  • Removing a corner at the kitchen’s back wall reduces complexity and costs.

In this plan, we also propose reducing the size of the closet in the mudroom and transitioning the walk-in pantry away from the exterior wall. This creates space to add a back kitchen or scullery, a kitchen design feature that’s becoming more popular among buyers.

Our redline of a client’s main-level production house plan includes simplifying framing at the mudroom, removing a back corner in a kitchen wall, simplifying the kitchen island’s shape, and adding a back kitchen or scullery.

Your architect can be your resource here to help you balance your metrics and priorities with buyer preferences.

Stay On Brand

As you evaluate your house plans, be mindful of any design features that already make yours stand out from the crowd. If your company is known for and markets a specific characteristic, like an ultra-luxe kitchen, breakfast nook, or large primary suite, keep it. This exercise is less about taking anything away and more about devising a way to keep special features while making them less expensive to build and sell.

In our redline of the second level of the same house plan mentioned above, we recommend improvements to the primary bathroom that not only economize the layout but add retreat-style features and more closet space.

  • Relocating the shower to the rear wall creates a luxurious his-and-hers shower space with a bench and high windows for natural light and privacy.
  • Separating the vanities has been a big request in our custom work, so being able to introduce this desirable feature to a production home is a benefit.
  • Eliminating a corner at the bedroom entry creates a larger walk-in closet with more hanging space.
Our redline of a production house plan’s second level removes unnecessary corners to reduce costs and expand usable living space. It creates a large dual shower, allows for the separation of vanities, and increases the size of the walk-in closet.

Reduce Home and Lot Size

Entry-level and many move-up buyers need a smaller and less expensive home, but they don’t want to give up the qualities that are appealing about purchasing brand new. Keep the gourmet kitchen, mudroom, and dedicated entryway, but make them smaller and better organized.

Consider ways to economize the structure to reduce costs. For example, retool an existing design with fewer external corners, or take things vertical with a box-on-box design.

Respond to Buyer Feedback

Often the best sources of design ideas come directly from your own buyers. If your company conducts surveys, mine them to learn more about what they love and don’t like about living in their new home.

Your customer service and warranty teams are the closest company representatives to your buyers after move-in. They are your eyes and ears, and probably receive lots of buyer feedback on home design. Note any commonalities you see and share them with your architectural team.

Re-Evaluate Covid-Inspired Plan Changes

If your company made any house plan changes to address buyers’ pandemic-related needs during 2020 and 2021, now may be the time to review them and determine if they’re still relevant. Keep in mind a lot of what drove buyer demand then continues today — flexibility, space to work remotely, and a balance of shared and private spaces are still just as important now as they were 18 months ago. But there are ways to improve, organize and right-size these spaces to address the way households use them day to day.

Bottom Line on Plan Redesign

Successful builders will take their lessons learned from previous down cycles to pivot, and update plans to get buyers off the sidelines, back into the market, and away from the competition. With your company’s key metrics at the forefront, the KGA team can help evaluate your portfolio and provide guidance to make your home plans stand out from the crowd.

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