A long-time traditional homebuilder is now offering compact, efficient homes in a bid to tap into two major emerging markets: Millennials and empty nesters.
Jim Soules, an industry consultant and developer, is designing eight detached homes in Petaluma, California. These spec homes are compact and efficient—two qualities that homebuyers are increasingly demanding in new homes.
“One of the most important things to consider is that 60 percent of U.S. households are one-and-two person. But, basically, almost all spec detached housing is targeted toward the nuclear family,” says Soules.
The problem with the nuclear family approach is that it only targets households with multiple members, “That demographic, right now, is less than 20 percent,” says Soules. This approach leaves smaller families and younger buyers behind.
For instance, if a single couple or an empty nester wants a detached house with a garden, courtyard and basic tech amenities, they are faced with an uphill battle. Ultimately, it becomes the difficult choice of settling in a larger detached home or being forced into an attached housing situation.
So Soules developed a plan to fill the gap, and it has a focus on green technology.
Soules builds homes that are targeted toward single families and empty nesters. “I would project that around 50 to 60 percent of my buyers will be professional women, because that was my demographic on my last similar project,” he says.
The Compact Building Mission and Potential
Soules’ project features eight compact homes with improved insulation, rooftop solar systems and airtight building techniques that bring these homes close to net zero.
Each home will be around 1,500-square-feet with a thermal envelope of R-21. R-value is a measure of resistance to heat flow through a certain material—higher R-values indicate that a material has high thermal performance. Hybrid heating sources, including hydronic heating and cooling, are used to improve HVAC efficiency.
“I think the homebuilding industry is starting to realize that some people don’t want a large home that is difficult to maintain,” says Soules, who even designs model homes for other builders who want to build more efficient, compact homes but don’t know where to start.
Engaging Demographics Through Community
The compact community is centered around a courtyard with a private yard and garden. This design was purposefully done to encourage community engagement and lure in new buyers.
“This is a place that will be very focused on community,” says Soules. His last compact community, finalized in 2002, features a potluck every week where the entire community gets together to eat and socialize.
Community engagement is crucial when selling to Millennials and empty nester buyers, because both of these demographics value socialization.
A simple outdoor entertainment area with a few pieces of connected tech can help you stand out and encourage a communal environment.
According to Soules, he has already received positive feedback and interest from single professional women, Millennials and active empty nesters—three lucrative demographics that any homebuilder would be lucky to count on.
Larger homebuilders that take steps to facilitate community engagement and high-efficiency homes can anticipate increased attention from these highly sought after demographic groups.
Soules estimates that this newest compact community will be finalized by August of 2017. TecHome Builder will be watching this development closely to see how Millennials and empty nesters respond to the project.
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