Outdoor living. A whitepaper by Kleber & Associates

Transcription

1 Outdoor living A whitepaper by Kleber & Associates

2 Introduction The purpose of this Kleber and Associates (K&A) white paper is to analyze the overall popularity of the Outdoor Living phenomenon by examining the growth of the trend, and explore its continued impact on residential design, home and building products, and the construction industry. To achieve this review, comparative information was evaluated stemming from original research (survey and focus groups) conducted by K&A during a nine-month period, followed by extensive secondary research compiled in the first quarter of 2009, and additional research in the first quarter of This white paper highlights the motivating factors affecting homeowners desire for Outdoor Living spaces, prominent product features and design trends, primary demographics and subsequent opportunities for housing professionals. Popularity of Outdoor Living According to an American Institute of Architects report, Outdoor Living emerged as the most popular special function room among homeowners in the second quarter of The AIA also noted in their 2014 Home Design Trends Survey that 69 percent of homeowners increased Outdoor Living options along with landscaping up 6 percent since Homeowners are using existing outdoor spaces to create ideal areas for relaxing and entertainment. Most homes are already equipped with decks, patios and back yards so it is easier for consumers to renovate these spaces as an alternative to adding extra room onto their homes. Key Drivers of Outdoor Living Changing Consumer Attitudes Increased Homebuilder Competition Falling Price of Building Products Rise of the Millennial Homeowner Population Shift to Temperate Climate Yet, the standard deck attached to a house is often considered insufficient as an Outdoor Living area; as such, many homeowners are maximizing these spaces with upscale amenities such as outdoor kitchens. In fact, a 2014 survey by the American Society of Landscape Architects found that this continues to be a desirable trend, as 92 percent of respondents showed interest in Outdoor Living.

3 Key Motivators Driving the Trend In-depth interviews and focus groups recently conducted by K&A helped define homeowner priorities and pinpoint the key motivators that are often considered in creating or renovating Outdoor Living spaces. In our original research, economic concerns were identified as a key motivator. The financial crisis of 2007 resulted in rising unemployment rates, loss in housing equity and the average American family s decreased discretionary spending. At that point in time, research responses included will encourage my family to spend more time at home and means that I will spend less money on eating out and entertainment. This is when the term staycation entered our collective lexicon consumers began spending vacation time at home instead of spending money on travel. In subsequent research, however, peace and relaxation emerged as key Outdoor Living motivators: In one of our Atlanta focus groups, a participant said, On Sunday mornings, we ll take the paper outside and I ll pretend I m in the mountains. You can only see the trees and it feels like getting away. Another Atlanta homeowner told us, I go outside to sit out in the sun, and I feel like I m at the beach. In San Francisco we heard, We have Reasons for Outdoor Living Increases the resale value of my home Enhances the environment of my home Is a way to find refuge or escape every day Spend time outside, even in bad weather Will encourage me to entertain at home Requires a lot of effort and maintenance Helps me connect with nature Encourages family to spend time at home Is very popular among people I know Is too expensive for me right now Means I will spend less money eating out Increases my perceived social status Is a waste of money Source: Kleber & Associates Outdoor Living Survey a water feature, which is important to me because it s calming, like the ocean. Last night we were trying to go to sleep and we opened the door, turned on all the water features, and went to sleep pretty quickly. In a subsequent survey, enhancing my home s overall atmosphere and increasing my home s resale value were tied for the number one motivation with an impressive 74 percent of respondents agreeing these are key benefits of an Outdoor Living space. 74% 74% 64% 53% 51% 50% 48% 45% 44% 41% 37% 22% 14% American Society of Landscape Architects Executive Vice President and CEO Nancy Somerville shares this outlook on the Outdoor Living trend. "Homeowners know that

4 designed landscapes add value to their lives as well as their property values," she said. "They're interested in livable, open spaces that are both stylish and earth friendly." More Key Motivators A 2014 Landscaping Trends Study conducted by Houzz, a leading platform for home remodeling and design, found that additional key motivators were gaining importance, including creating space for entertaining and fixing problems in my yard. According to Houzz, 56 percent of homeowners were planning updates to make my yard more friendly for entertaining, and 55 percent were solving problems such as flooding and drainage (41 percent), combatting too much sun (25 percent) and increasing privacy (23 percent). In the western U.S., nearly a third of homeowners (30 percent) were motivated by the region s water shortage, and planning updates to reduce the water needed to maintain my yard. Landscaping Motivations Make my yard more friendly for entertaining 56 Make my yard more functional 44 Increase my home s value 34 Create more living space 27 Changing needs 20 Use less water 19 Upgrade features Houzz Inc. Back yards are evolving into entertaining spaces (83 percent), outdoor dining spaces (73 percent) and outdoor living rooms (53 percent). To make this possible, homeowners are incorporating features like patios and decks (83 percent), BBQs (48 percent), fire pits (48 percent), sound systems (19 percent) and outdoor kitchens (14 percent). For evening entertaining, seven in ten homeowners are installing outdoor lighting.

5 Penetration of Outdoor Living Amenities Professional Landscaping Vegetable Garden Candles Outdoor Fireplace/Pit Tiki Torches Water Feature Sunroom or Screened-in Porch Hot Tub Mosquito/insect Eliminator Sound System Outdoor Area Rug Television Outdoor Heater / Heat Lamp 29% 27% 18% 16% 16% 15% 15% 14% 12% 12% 6% 5% 3% Source: Kleber & Associates Outdoor Living Survey comforts that were once limited to indoor rooms. The survey also found that a majority of homeowners are making eco-friendly choices for their yard which not only benefit the environment but also save time. Product and Design Preferences K&A s original research demonstrated that the penetration of outdoor living basics was already well established. Grills, gardens and landscaping, basic outdoor dining furniture and outdoor lighting ranked among the highest. In terms of product penetration, some of the fastest growing Outdoor Living product categories were still registering low on adoption; however, we found that the overriding trend is that people want their outdoor spaces to function as an additional living area with all of the Comprehensive secondary research conducted in the first quarter of 2015 confirmed that consumers wish to integrate smart technology into Outdoor Living spaces. As technology has become a part of everyday life (especially for Millennials), we conclude that gadgets such as high-definition TVs, technologically advanced outdoor kitchens, grills and lighting have become must-haves for Outdoor Living spaces and will only continue to gain importance in the future. Other product features and design trends of note: K&A Plan-to-Install Hot List Outdoor Item 12-Month 5-Year DIY Landscaping Flower Garden Outdoor Lightings Lounge Furniture Cushions for Furniture Vegetable Garden Outdoor Dining Furniture 35% 31% 16% 15% 15% 23% 14% 25% 24% 34% 33% 33% 19% 27% Base: 404 *12-month activity refers to the proportion of respondents who are likely to purchase/install this item within the next 12 months (including new entrants and existing owners replacing or upgrading). **5-year activity refers to the proportion of respondents who are likely to purchase/install this item within the next 2-5 years (including new entrants and existing owners replacing or upgrading). Source: Kleber & Associates Outdoor Living Survey

6 pergolas, arbors, fencing, sleeping spaces, outdoor cooling systems and heaters, showers/baths and hammocks. We ve also confirmed that decks and patios remain the gathering point of Outdoor Living, just as kitchens are the focal point of entertainment and family time indoors. The Impact of Innovation The Most Admired Outdoor Living Design Elements Fire Places / Fire Pits Outdoor Lighting Barbecue Grills Outdoor Furniture Seating/Dining Areas Wi-Fi / Internet Access Planters/Sculptures Counter Space Stereo Systems TV/Home Theaters Utility Storage Sinks Refrigerators The current trend in Outdoor Living isn t driven solely by homebuyer preferences. As with any trend, there are mitigating factors that can affect the marketplace and result in changes to consumer attitudes. For example, new design ideas may catch on in one part of the country and then gain prominence in other areas over time. Or innovations in manufacturing processes can drive down costs, making products more affordable and available to a wider audience. According to a recent article in Professional Builder, an example of this (and possibly, the beginning of the Outdoor Living trend) dates back to Deane Homes, then one of the largest builders in the nation, developed a home plan with a large pass-through window in the kitchen opening to a small patio. They called it The Garden Kitchen. The design was an instant hit with buyers, selling twice as fast as other home designs. And now, fifty years later, new design ideas and innovations are once again spurring new trends in homebuilding. In that sense, one might think of Outdoor Living design options as Garden Kitchen 2.0. Custom builders today are offering a wide array of upscale Outdoor Living options. From loggias to verandas to porticos to patios, the customizable features are seemingly endless. In a recent article in KnowAtlanta, Benchmark Homes builder Lisa Justus elaborates: Most of the loggias and verandas we design are covered and arched with columns and fireplaces, opening up to the outdoors. In Benchmark Homes Masterpiece Collection, homeowners can customize their Outdoor Living setting, choosing from a wide selection of features including outdoor lighting and music options, fireplaces, pools, hot tubs, water fountains, kitchens and living areas.

7 Outdoor living is a natural, healthy and somewhat unique opportunity for Atlanta, adds Justus. Entertaining becomes more fun and engaging because now you have another hostess the great outdoors. Another reason for the growth in Outdoor Living spaces is the emergence of innovative outdoor-specific appliances and systems specifically designed for outdoor kitchens and entertainment areas. Just a few years back, appliances and electronics designated for Outdoor Living areas were really made for interior applications and were not very effective, remarked one builder. Now manufacturers are making useable products for the outdoor environment, such as TVs with glare-free screens. The Effects of Homebuilder Competition Yet another driving force behind the Outdoor Living phenomenon is homebuilder competitiveness. With the effects of the recent financial crisis still lingering, builders and architects are looking for ways to differentiate their designs, attract customers and stimulate sales. For example, Rosewood Homes in Scottsdale, Arizona has incorporated expansive 12- foot-wide, 8-foot-tall multi-slide doors in their latest home plans. We experimented with the technology in some of our spec homes, and we feel really good about it. The buyers absolutely love it, says David Kitnick, president and founder of Rosewood Homes. Our new model will have a 12-foot panel on the back of the house, right off the great room, and there s a large covered patio behind it. Buyers are going to see it right away when they enter the home. Twelve feet of glass is really impressive. Kitnick explains that the oversized sliding doors are just the kind of design innovation that will differentiate his homes from the competition. He plans to offer the doors as an option in select plans in three additional Rosewood communities. People s mindset has changed because of the challenging economic times. They aren t buying the new car or TV as quickly as they used to, and they re staying put in their homes. So we ve all tried to find new products and new designs to give somebody a compelling reason why they should move. This is a product that they don t have in their current home. And guess what? They re really not that expensive.

8 Outdoor Living Sells Homes According to a Professional Builder Survey, 60 percent of builders say they have expanded their lineup of Outdoor Living options in the past 12 months. More than half of builders said that, when it comes to selling new homes, Outdoor Living is more important today than it was two years ago. Outdoor Living is the new dining room, says Phil Corley, vice president of marketing for Pathway Communities in Atlanta. We are seeing less formal dining rooms and more Outdoor Living spaces. Many builders are using the trend as an incentive to get potential buyers in the door. For instance, Atlanta-based Edward Andrews Homes is offering free upgrades like brickpaver patios, screen-in porches, and outdoor kitchens to entice buyers. Another builder commented, I now include patio-deck spaces off of as many major living areas as possible. Outdoor space is cheaper to build than enclosed space and it increases the livable area of the building in my clients eyes at a lower cost per square foot without posing zoning issues. Broadening the Customer Base Advancements in technology, product innovations and manufacturing efficiencies are also helping to drive the growth in Outdoor Living by making high-end features and amenities more affordable and available in effect, extending the potential customer base beyond only luxury homebuyers. According to a recent article in Professional Builder, a number of manufacturers including Western Window Systems, Paramount Windows, Southland Door and Windows, and Ply Gem Windows are designing and selling multi-slide and multi-fold product lines targeted toward production builders. As the housing market continues its recovery and Outdoor Living remains a hot-selling feature, the list of manufacturers offering these types of doors for the production market will only grow. As a result, production builders are getting products that enable them to create real design statements in their plans at price points that fall within the range of a mid- to higher-end upgrade. Patio door technology that was simply out of reach for most production builders four or five years ago with price points that started in the $10,000- $15,000 per unit range are now available for about half that. When these systems first came out, they were about $1,000 a lineal foot, so for a 15- foot door, that s a pretty expensive door, says Debra Falese, AIA, president of Woodley

9 Architectural Group s California office, Santa Ana, who s designed plans for production builders that incorporate multi-slide/fold doors. Now we re seeing them come down to about $400 a lineal foot, so that s big price savings. Demographics Driving Outdoor Living Baby Boomers, with their massive population and substantial disposable income, continue to remain an integral buying group in the home and outdoor living marketplace. However, as Boomers look to their retirement years, many are seeking improvement of their overall home environment with the incorporation of Outdoor Living spaces that serve as a place for rest, relaxation, family time and entertaining. In addition, as Boomers seek more non-traditional retirement options such as living in a downtown area close to the action of city life, these individuals are likely to incorporate outdoor spaces into their homes to increase curb appeal in a housing market that is in the process of bouncing back from a major downturn. Although Boomers have been essential to the Outdoor Living world, Millennials are emerging as important drivers of the outdoor living movement. They are now coming of homebuyer age and seeking homes with outdoor living areas that are already complete or containing areas that can be improved or remodeled. What a Difference a Generation Makes BABY BOOMERS MILLENNIALS Spends More Time Outdoors 24% 62% Ranks Outdoor Living Important or Very Important 74% 85%

10 In a 2015 Outdoor Living Trends Survey conducted by Industry Edge, The Millennial generation (age 18-35, and now making up a quarter of the population) was found to have more interest in Outdoor Living than Baby Boomers. Millennial men in particular are investing $100 more per person on plants than the average consumer. Young people, as well as America s growing Hispanic population, particularly enjoy growing fruits and vegetables to share with family and friends. Millennials technology-obsessed lifestyles and sociable, open-minded and inclusive characteristics seem to point them in the direction of a community-oriented lifestyle. Relationships are vital to them. They love to connect with friends (evident in their infatuation with social networking), validating the need for spaces around their homes dedicated to both me and family time, which also provide the ability to entertain friends on a budget. Further good news is that despite the economic downturn and recent housing industry crisis, Millennials maintain their optimism about the future and view the current housing marketplace as more of an opportunity than a liability. The National Association of Home Builders surveyed and specifically targeted Millennials who many are dubbing the largest generation since the Baby Boomers. The survey reported that 90 percent of Millennials prefer to live in rural or suburban areas rather than an urban city atmosphere. More Millennials than ever before have either purchased a house in the last three years or plan to buy a house within the next three years. Since they are more likely to spend time outdoors than their older generation counterparts, it makes them the primary target market for Outdoor Living products. Geography and Outdoor Living Average Temperatures of Top 2015 U.S. Real Estate Markets One more interesting trend we believe may be contributing to the growth of Outdoor Living is the shifting geography of the U.S. population. According to U.S. Census data, while the West and South saw growth rates of 13.8 and 14.3 percent, respectively, over the last decade, the Midwest grew by 3.9 percent, and the Northeast by a mere 3.2 percent. These figures reflect a movement of young people westward, as well as an overall population shift to the South and West. 1. Houston 2. Austin 3. San Francisco 4. Denver 5. Dallas/Fort Worth 6. Los Angeles 7. Charlotte 8. Seattle 9. Boston 10. Raleigh/Durham 11. Atlanta 12. Orange County 13. Nashville

11 While the average outdoor temperatures are decidedly more temperate in these areas than in the Northeast and Midwest, other research suggests that Outdoor Living is also popular in colder climates. Still, we can t help but conclude that beautiful, sunny weather and mild winters are contributing to the sustained growth of Outdoor Living. Bottom line the Outdoor Living phenomenon has exhibited sustained growth ever since we first identified the trend in our original 2009 Outdoor Living white paper. Economic trends sparked homeowner interest as we saw average home sizes begin to decrease and renovation of existing home spaces increase. At the time, we believed Outdoor Living was initially a cost-effective alternative to expensive vacations, entertainment, eating out and shopping. Today, however, subsequent research has shown more than mere sustained growth. Other market forces have exerted a combined impact on the Outdoor Living phenomenon, driving new home sales, landscape projects, and home redesigns and renovations to an even higher level. The Outdoor Living trend shows no signs of slowing, at least in the short term. About K&A Kleber and Associates is an integrated marketing communications agency serving the home construction and building products industry for 28 years. Through creative communications, graphic design, public relations, digital marketing and integrated advertising campaigns, we help our clients achieve success. We build better brands that build a better home. To download additional K&A white papers, please click here.