Which green products are most important to buyers and homeowners?

Last week, the National Association of Home Builders highlighted the key green products and systems that consumers are looking for in a home. The 2020 Green Single Family and Multifamily Homes SmartMarket Brief surveyed builders and remodelers regarding their consumers’ most requested green products. Though the data was collected before the impact of COVID-19 was felt on the industry, eco-friendly features are expected to remain high on wish lists overall.

“Customers, who have spent months in their homes, have developed a heightened awareness of what efficient, comfortable and healthy means to them, and builders and remodelers need to be ready to meet these needs,” NAHB noted in a press release.

According to the brief, consumers are most interested in products and services that directly affect utility bills and indoor environmental quality. Over half of builders and remodelers (57%) ranked finding a home that is energy efficient as their top request among owners and homebuyers, while most (84%) ranked it at least in their top three requests. In regard to product systems that impact indoor environmental quality (IEQ), water conservation and renewable energy, around half of builders and remodelers ranked those requests in their top three as well (44-54%). And roughly a quarter of builders and remodelers surveyed noted that owners and homebuyers requested material and resource-conserving products.

Data also showed these requests being acted upon by builders and remodelers. In regard to the most important item in terms of energy efficiency, LED lighting was the most requested among owners and homebuyers with an 85% request rate. It also ranked as the top green project in terms of what remodelers have undertaken at 91%. Additionally, direct outdoor ventilation using fans ranked as the top IEQ improvement among owners and homebuyers (72%), and there are currently 81% of builders and remodelers putting such projects into place. Likewise, the results for water conservation are the same: 72% of owners and homebuyers have requested high-efficiency plumbing fixtures as their top green product, meanwhile 81% of homebuilders have started those projects. Looking at reusable materials, 84% of builders and remodelers are implementing such products based on a 64% owner and homebuyer request rate. By contrast, owners and homebuyers have not shown much interest in solar, with only 8% requesting this renewable energy source, which may be why only 16% of such projects have been put into place.

So next time you’re writing up a listing description for a home with eco-friendly features, you might not want to concentrate on the flashy items, since simpler energy-efficient green products ranked the highest among owner and homebuyer requests. Targeting those consumer hot-buttons of efficiency when marketing a home may attract that next high-performance sale you’re hoping for.

For more information about buyer preferences, read our post on buyer home preferences post-COVID-19.

The coronavirus effect: Young adults are moving back home

Nearly 3 million American adults moved in with a parent or grandparent in March and April, amid an unprecedented environment of coronavirus contagion concerns and record-breaking unemployment.

According to a new study released by Zillow, more than 30 million adults were living with their parents or grandparents in April, the highest number ever on record. 

Not surprisingly, Gen Zers, who were born between 1995 and 2015, represented the vast majority — 80% — of those who recently moved back in with the folks.

Typically, 53% to 55% of Gen Zers live at home in April, compared to 55% to 57% in July. But this April, that share surged as high as 61%, an unprecedented level.

That’s not good news for landlords who’ve had to absorb the loss of this renter population. According to the report, Gen Zers pay an estimated $726 million in rent each month, representing 1.4% of the total rental market.

While employment and living situations among this demographic tend to be seasonal and fluctuate even during normal times, the sheer number of those boomeranging back home casts a grim shadow on the future employment potential for Gen Zers, not to mention the rental market they’re leaving behind.

“It is highly unlikely that all leases will be broken, and this full amount would go unpaid, but it serves as a gauge of the potential impact on housing,” the report said.

While students returning home after the nationwide closure of college campuses this spring was behind some of the mass migration, so was unemployment. The number of employed adults ages 18-25 fell by more than 25% — or 5.9 million — in March and April and more than 2 million count themselves as no longer in the labor force.

Adulthood, interrupted

But even before the coronavirus lockdowns and subsequent massive unemployment hit the country — recessions, wage gaps, skyrocketing college costs and student debt led an unprecedented number of emerging adults to take a page from Pete Davidson’s book and move into their parents’ basements.

According to the study, before the pandemic, almost half (46.5%) of employed young adults already lived in a parent’s home. By this April, the share had risen to 49%. And that’s not even considering those who stopped looking for work or students who were not in the labor force already, adding another million-plus to the mix.

While it’s unclear how many of those migrating back to their family homes did so temporarily — either because they wanted to escape health concerns that come with urban living during a pandemic or perhaps to enjoy some of the pandemic luxuries of the family home — there is no doubt that this phenomenon will hurt the U.S. rental market.

Nearly 80% of 18 to 25 year olds who don’t live with a parent are renters who are responsible for approximately $6 billion in gross rent per month. While some of that rent is likely to be paid and some of it represents terminated leases, the potential impact is still significant, depending on the area.

Oklahoma City, Austin and Nashville have the most exposure, with 1.9% of their local rental markets at stake, according to the report. Meanwhile, Miami, New York, and Los Angeles are less exposed, because they have larger concentrations of older millennial renters and other older generations.

Boston, home to some 35 colleges and universities, had a significant exposure, with Gen Z rental risk level of 1.5%.

Recessions typically cause young adults to delay entry into the housing market and remain with their parents — or combine households by moving back in with them — but the situation usually changes once jobs return.

While the May jobs report shows some promise, deep economic shocks have also historically prompted a shift away from spending and an increase in precautionary saving.

How this plays out remains to be seen, but it could be a while before younger Americans are ready to leave the safety and financial security of the family nest.