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August 13, 2012

Home design market in recovery, data says

Photo / Pablo Robles Business is booming at Jennifer Morgenthau's architecture firm in Newington, leading to cautious optimism that Connecticut companies that the residential design market has moved beyond the housing crash.
By Katie Bucaccio

Connecticut residential architects see the housing design marketing turning around this year, agreeing with findings from an American Institute of Architects survey.

“Every spring the market cools down, but this is first time since the housing crash that it hasn't. We finally have some momentum,” said AIA chief economist, Kermit Baker.

The AIA Home Design Trend Survey, released in June covering the first quarter of 2012, indicated business conditions for national residential architects are showing the strongest growth since 2006.

“I don't know what it is about this spring, but it's been insane,” said Jennifer Morgenthau, owner of Jennifer Morgenthau Architect, LLC in Newington. “During the summer, work usually slows down, but I'm busier than I've ever been,”

The survey findings, supplied by 500 residential architectural firms nationwide, focused on home layout and use of interior and exterior space. The answers show a reversal in the six-year trend for smaller home sizes, as well as an increase in remodeling and renovation projects.

In the countrywide survey, 20 percent of respondents reported increases in house volume in their projects and 8 percent reported increases in square footage. This follows 2011's numbers of 11 percent reporting increases in volume and 5 percent reporting increases in square footage.

“These numbers are a sign that the market has bottomed out and is turning around modestly,” said Baker. “We're working off an extremely weak base and we have a long way to go, but it will continue to improve.”

As homeowners are still hesitant about building or buying new houses, the home improvement market is providing much of the work for local architects.

John Rountree, owner of Rountree Architects in Westport, specializes in energy efficient residential projects. In the past year, he has worked with an increased number of clients eager to retrofit their insulation and windows to reduce overhead.

“People are finding it's more economical to renovate rather than buy new, that way they can customize to fit their needs. I've been getting a lot more calls for that,” Rountree said.

In the AIA survey, 53 percent of architects reported increased numbers in kitchen and bath remodels and 51 percent reported an increase in new additions or alterations. The report also indicated a growing trend in outdoor living, as homeowners aim to expand their living space with sunrooms, three-season rooms, patios and decks.

Both Rountree and Morgenthau rely on renovations and remodels to get them through the housing slump, but said within the last year business picked up significantly. With fewer than half the number of homes being built nationwide than before the crash, the market for new construction remains limited.

The decline of the housing design market forced many residential architects to change their business practices.

Morgenthau began to share renovation jobs with builders and contractors, and their referrals helped to keep her in business. She plans to maintain strong relationships with builders as business conditions improve.

“I started spending time on marketing. I had never had to advertise before,” said Morgenthau.

The markets are growing much more rapidly in the South and the West, so it will take longer for a full recovery to reach Connecticut, Baker said.

Despite the recent progress, local architects are leery of placing too much trust in a modest upswing. Rountree said potential clients are still too nervous about the economy to make large investments. Morgenthau remains cautiously optimistic about the future.

“All of us are afraid of how the market's been. The feast now might be a famine in a few months. I hope it continues, but I don't know how long it will last,” said Morgenthau.

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