Smart investors seek trends with staying power

See what’s hot—and what’s not—in new construction

Whether you’re a first-time homebuyer or busy builder looking to turn a quick profit, home design trends can make or break an investment. Each year, industry insiders chronicle all the must-have amenities of the moment. But just as a certain color or design feature may take the market by storm, it can also significantly decrease a home’s value overnight.
A report from the Mortgage Bankers Association reveals some surprisingly strong numbers for the commercial real estate market. In the first three months of 2018, major investors increased their debt holdings by $44.3B, representing a 1.4% boost from late 2017.

On fire, but bound to fizzle

Many of today’s fads gain traction thanks to popular design shows like Fixer Upper, Property Brothers and Flip or Flop. The premise is simple: builder and designer duo take a distressed property and transform it into someone’s dream home, bagging a huge profit in the process. Viewers fall in love, posting pictures of gorgeous reclaimed barn doors, vintage bathroom wallpaper and open-shelf kitchens to social media for all to admire.

The problem? Many of these features look great in the showroom, but lack practicality in real life. Barn-style doors add so much character, but do very little to block out sound or ensure privacy. Swapping kitchen cabinets for open shelving may showcase your fabulous dishware, but who’s going to keep everything clean? And putting wallpaper in your home’s most humid room is a clear no-no.

So, what’s here to stay?

First, consider the power and impact of color. Depending on your chosen hue, a home’s front door, siding, interior walls, countertops, and cabinetry set the mood and place limitations on other design possibilities. In fact, color plays such an important role in real estate that Zillow Research performed a Paint Colors Analysis last month. Some of their findings are explored below.

Home Color Watch

Summer 2018

2.9%
Average home value gained by painting the front door black or charcoal

1.3%
Average home value gained by painting the bathroom periwinkle blue

$2,310
Average money lost when selling a house with red or brick-colored kitchen

$1,547
Average money gained when selling a tuxedo kitchen with white cabinets and black island

*Stats contributed by Zillow, 2017-2018

 

Other features to follow

Savvy designers, builders and real estate agents have settled on a few trends likely to stand the test of time. First, look for elements that marry form with function. New York designer Elena Frampton says sustainability is key: “Trends that aren’t going away soon include going green with recycled materials…and maximizing the use of LED lighting.”

For new construction, smart storage is a huge selling point. Walk-in closets, laundry rooms, pantries and bathrooms with built-in shelving are topping homebuyers’ lists as often as marble countertops and Shaker carpentry. This is another reason why kitchens with hung cabinets are so much more desirable than those with open shelving.

Finally, more families are seeking universal design features. Even if you’re buying or renovating for yourself, consider resale value and the needs of future residents. For instance, Custom Home Online recommends “zero-step walkways that flow naturally from the driveway to the front door” or a “first-floor en-suite bedroom for aging parents,” which can serve just as easily as a traditional “study or guest room.”

Tracking current trends is just one piece of the larger investment puzzle. While painting your front door black won’t guarantee Zillow’s $6,271 markup, it’s wise to stay abreast of what people are searching for in today’s market.

Informed decisions are always in style

Through changing trends and housing cycles, Everest elevates your home financing experience.