Home remodeling has become one of the most popular hobbies since the COVID-19 pandemic began. Fifty-two percent of respondents say they’ve spent more on their homes since the pandemic. On average, homeowners reported spending $1,349 on home-related purchases since the start of the COVID-19 outbreak, according to a new survey from Cinch Home Services of more than 1,000 homeowners.
So, what are they spending on? They’re mostly buying furniture and appliances, according to the survey.
A lot of those increasing furniture needs may be for outfitting home offices. Nearly three-quarters of workers between the ages of 18 and 74 started working from home since the pandemic, according to a LinkedIn and USA Today survey. About 54%, however, did not have a remote work setup prior to COVID-19—so they likely needed to make some purchases to get a home office ready.
The following are the rooms that homeowners are redecorating the most since the pandemic.
The top reason for pandemic-inspired home improvement projects has been to improve comfort (57.2%), followed by the desire to modify the home’s atmosphere (37.9%) and improving the home’s organization (29.8%), according to the survey. About 24%—mostly millennials—also said they spruced up the home to improve their mental health while sheltering in.
Homeowners across the country have transformed their kitchens and living rooms into temporary workstations. But have they created an optimal setup for remote work? Kelsey Stuart, CEO of Bloomin’ Blinds, offers the following tips to make a home office more inviting and motivational.
Give the walls a fresh coat of paint. Whether you have a designated home office or plan to repurpose a spare bedroom or basement, try a quick and fresh paint job to transform the room. Lighter tones reflect more light, helping to make a home office feel roomier. Try a light, simple color scheme in order to promote high energy and creativity. This will also provide a professional background for video conference calls. Need inspiration? Try these 2021 paint colors of the year fromBenjamin-Moore,Behr,Pantone, orSherwin-Williams.
Good lighting is key.Lighting is critical to productivity and professionalism in the age of Zoom calls. There are two ways to control the lighting in a room: through natural light via windows and artificial light, using lamps and bulbs.
If you haven’t already, swap out existing lightbulbs for LED bulbs. Relatively inexpensive, LEDs are energy-efficient and help light up a room better than traditional bulbs. Eliminate shadows by adding lamps where needed.
Whether you’re trying to focus for an extended period of time or are about to log into a videoconference call, controlling the amount of natural light in the room impacts your productivity. You might find it helpful to rearrange your office based on natural light sources so that your eyes don’t get fatigued. Also, control the amount of light in the space by adding blinds, which give you the ability to direct the light in your office. You could also use shades with motorized units to make easier adjustments. Blinds also can have sun sensors that will lower shades if the window gets too hot, helping you to stay focused on your work.
Bring in the outdoors. A functional and beautiful add-on to your office space, plants have been shown to boost creativity while also creating a calm environment to work—all while filtering the air you breathe.Here are ideas for what plants to add.
Personalize your space.We’re all spending more time in our home office, so don’t forget to add the personal touches that remind you of why you go to work every day. For instance, photos of loved ones or a fun pattern on a floor rug can help you create a space that you’re happy to spend time in. However, if you’re staging the home office for resale,you will want to remove such personal items.
View some examples of home offices for inspiration.
Surging lumber pricesand shortages in building materials are keeping some homeowners from completing renovations or repairs, forcing them to put off critical projects, the National Association of Home Builders reports. Whereas new-home buyers typically bear the brunt of construction cost increases, current homeowners clamoring to redo their property during the pandemic are feeling the burden, too.
“When talking to prospective clients about projects, lumber pricing is now always part of the discussion, as they are aware of the issue and are concerned about how that may impact the cost of their projects,” Kenneth Kostecki, a Virginia contractor and remodeler, told the NAHB. “Availability of other materials—such as windows, doors, appliances, plumbing fixtures, tiles, etc.—have also been in very short supply. This has led to additional project delays, which has impacted both cash flow and the overall project schedule, meaning that homeowners are left in the middle of a construction project with their house torn apart and unfinished for a longer period of time.”
Jarrett Kravitz, a builder and remodeler from Connecticut, told the NAHB that twice he’s had to put plywood over a customer’s patio door to prevent access to the home’s deck, which had been left unfinished. The surging price of materials to build the deck exceeded the customer’s budget during the project, Kravitz said.
Projects like decks, fences, or finished basements are experiencing delays. “I had a homeowner who was a disabled vet and couldn’t afford a wheelchair ramp due to the rising cost in lumber,” Dennis Sweet, a builder in Michigan, told the NAHB.
One in four Americans purchased a smart-home device in 2020, according to a new survey from SafeWise, a firm that offers safety solutions and resources for the home. The majority of those surveyed say they are spending more time using home tech and are increasing their home tech spending and report using smart-home technology at least once a day.
SafeWise surveyed 1,000 Americans to ask them about their home technology spending habits and how they’ve changed since the pandemic.
Eighty-five percent of Americans bought a smart-home device in 2020, according to the survey. The most popular smart-home products over the past year have included TVs, speakers and displays, and lighting. Also, more than 40% of Americans surveyed say they purchased a security camera or alarm system in 2020.
The pandemic likely fueled interest in smart-home tech as more people spent more time at home, including working from home. The U.S. Census Bureau reports that more than 88 million people have been teleworking since the pandemic. That likely has prompted more households to increase their tech usage. Seventy-six percent of respondents said they had never purchased smart-home tech in previous years.
But smart-tech spending is also being driven by the desire to increase entertainment, comfort, and convenience, the survey said. That uptick overshadowed spending on safety-related devices, which usually have been the most popular smart-home devices.
Companies are making changes to protect workers from COVID-19 as they prepare for a return to the office. But beyond more attention to cleaning protocols and added divisions for social distance, companies also are considering additions, such as new tools for remote workers.
More than 80% of companies are reportedly considering a hybrid work model where employees will be able to split their time between the office and working remotely, according to a survey from KayoCloud, a real estate technology platform.
New modes of work will likely transform the design of many workspaces. For example, the need for personal desks may be replaced with “hoteling” workstations or “hot desks,” which can be used by whoever is at the office that day. Employees may have to reserve their “hot desk” for the day prior to just showing up.
“A year ago if I had interviewed people, they would have said they definitely need three file cabinets and a bookshelf,” Andrea Vanecko, a principal at NBBJ, an architecture firm, told The New York Times. “Now there’s a very different answer.”
Also, conference rooms could be replaced by Zoom rooms. A large screen on the wall might become a necessity for presentations or to allow remote co-workers or others to appear on video. Some closet-sized phone booths may be added and transformed into private stations for videoconferencing booths with built-in screens.
Holograms could also be coming to the workplace. Some companies are reportedly exploring the use of holographic representations of employees who plan to stay remote full-time. Devices that use 360-degree cameras, microphones, and speakers can be placed on a table or tripod to improve the sound and visibility of video conferencing and even possibly one day projecting a remote employee into an empty seat in the physical world as they join in the discussion virtually, The New York Times reports.
Pending home sales dipped for a second straight month in February, the National Association of REALTORS® reported Wednesday. Each of the four major U.S. regions witnessed month-over-month declines last month, while results were mixed in the four regions year-over-year.
The declines come not from a cooling market, but from a red-hot one in which inventory is scarce. “The demand for a home purchase is widespread, multiple offers are prevalent, and days-on-market are swift, but contracts are not clicking due to record-low inventory,” says NAR Chief Economist Lawrence Yun.
NAR’s Pending Home Sales Index—a forward-looking indicator based on contract signings—dropped 10.6% to 110.3 in February. Year-over-year, contract signings fell 0.5%. An index of 100 is equal to the level of contract activity in 2001. “Only the upper-end market is experiencing more activity because of reasonable supply,” Yun says. “Demand, interestingly, does not yet appear to be impacted by recent modest rises in mortgage rates.”
Yun says that even with rising mortgage costs, rates are expected to remain relatively low at no more than 3.5% in 2021, noting that rates are still advantageous to both prospective buyers and to current homeowners who are contemplating refinancing.
Nationally, homes priced above $250,000 have largely been driving home sales for the last several months. However, Yun indicates that even homes priced above $500,000 to less than $1 million are subject to the same low-inventory dilemma.
“Potential buyers may have to enlarge their geographic search areas, given the current tight market,” says Yun. “If there were a larger pool of inventory to select from—ideally a five-or a six-month supply—then more buyers would be able to purchase properties at an affordable price.”
Following months of sharp gains, existing-home sales reversed course in February, falling 6.6%, the National Association of REALTORS® reported Monday. However, the dip—precipitated by a persistent inventory crunch that’s getting worse—isn’t necessarily a significant drag on the real estate market, says NAR Chief Economist Lawrence Yun. “The market is still outperforming pre-pandemic levels,” he says.
Despite the supply challenges, all four major regions of the U.S. posted year-over-year sales gains in February, according to NAR. Total existing-home sales—completed transactions that include single-family homes, townhomes, condos, and co-ops—fell to an annual rate of 6.22 million in February. Sales are still up 9.1% compared to a year ago.
Yun cautions that a slowdown in sales growth over the coming months is possible as home prices and rising mortgage rates chip away at housing affordability. “I still expect this year’s sales to be ahead of last year’s, and with more COVID-19 vaccinations being distributed and available to larger shares of the population, the nation is on the cusp of returning to a sense of normalcy,” Yun says. “Many Americans have been saving money, and there’s a strong possibility that once the country fully reopens, those reserves will be unleashed on the economy.”
Here’s a closer look at key indicators from NAR’s latest housing report.
Home prices: The median existing-home price for all housing types was $313,000 last month, a 15.8% jump compared to a year earlier. Prices rose in every major region of the U.S. annually, led by a 20.6% and 20.5% gain in the West and Northeast, respectively. The Midwest saw a 14.2% increase, and the South posted a 13.6% increase in annual prices.
Housing inventory: The number of homes for sale continued to decrease in February, down nearly 30% compared to a year earlier. Unsold inventory now sits at just a two-month supply at the current sales pace.
Days on the market: Seventy-four percent of homes sold in February were on the market for less than a month. Properties typically stayed on the market for 20 days in February, down from 36 days a year prior.
First-time buyers: First-time buyers comprised 31% of sales in February, down slightly from 32% a year earlier.
All-cash buyers: All-cash sales accounted for 22% of transactions in February, up from 20% a year ago. Individual investors and second-home buyers accounted for the biggest bulk of all-cash sales and purchased 17% of existing homes in February.
Regional Breakdown
The only region to see a month-over-month uptick in home sales last month was in the West. Here’s a closer look at how existing-home sales fared across the country in February, according to NAR’s report:
Northeast: Existing-home sales dropped 11.5% in February to an annual rate of 770,000, a 13.2% increase from a year ago. Median price: $356,000, up 20.5% from February 2020.
Midwest: Existing-home sales fell 14.4% to an annual rate of 1.31 million in February, still 2.3% higher than a year ago. Median price: $231,800, a 14.2% climb from February 2020.
South: Existing-home sales dropped 6.1% to an annual rate of 2.77 million in February, still 9.9% higher than a year ago. Median price: $271,200, a 13.6% increase from February 2020.
West: Existing-home sales increased 4.6%, reaching an annual rate of 1.37 million, up 12.3% from a year ago. Median price: $493,300, up 20.6% from February 2020.
The median down payment in San Francisco is higher than the median home price in 44 other large U.S. cities, according to a new study by Point2, an online real estate marketplace. Home prices are over the million-dollar mark in San Francisco and Fremont, Calif., and home buyers are bringing higher down payments to close.
The following are the cities where home buyers are making the largest down payments on a home sale.
Fortunately, many buyers don’t have to bring such large amounts to closing. The median down payment was 7.7% of the median sales price for homes purchased with financing during the fourth quarter of 2020,according to ATTOM Data Solutions, a real estate data firm. That translates to about $24,500.
Co-working and flexible workspace providers saw business quickly dwindle as the COVID-19 pandemic struck last spring and the shift to remote work began. These businesses sublet space on short-term contracts, which allowed tenants to leave quickly as employees moved to working from home.
However, investors and analysts are turning bullish that co-working and flexible office providers such as WeWork and IWG could soon see a boom in business as workers return to offices.
Still, there’s a lot of catching up to do. WeWork’s occupancy rate globally plunged to 47% at the end of 2020. It lost $3.2 billion last year, The Wall Street Journal reports. Before the pandemic, co-working spaces were the fastest-growing type of office space in commercial real estate, according to JLL. But the pandemic struck the sector particularly hard.
On the other hand, traditional property service providers have been more protected in the pandemic since their tenants sign long-term leases. Even as offices have remained mostly empty, building owners could still collect rent.
But moving forward, property providers may be more drawn to shorter-term leases. As such, investors are seeing signs that co-working spaces could hold a special attraction to offices moving forward.
Flexible leases could grow from less than 5% of the market today to as much as 30% by 2030, the real estate firm JLL forecasts.
Co-working spaces could grow as an option as companies may be reluctant to sign a 10-year lease until they better understand what the future of work will look like and how employees will divide their time between home and office. “Some may turn to looser office arrangements longer term, accelerating a trend already building before the pandemic,” says reporter Carol Ryan for The Wall Street Journal.
Companies that press forward with a remote office likely will still find they need a space to meet in-person at times. Also, some offices may decide on a hybrid workweek approach—splitting time between the office and home—which could also cause companies to look at flexible office space as an option.
“Co-working spaces have the potential to provide vital business services to support the remote workforce closer to where they are, especially as residual anxieties linger over taking public transit,” Brent Capron, design director of interiors at architecture firm Perkins and Will’s New York studio, told CNBC in an article on co-working spaces.
New homes remain in high demand among home shoppers, but sales are starting to fall as builders slow down inventory. Persistent delays from supply shortages, rising material costs, and labor shortages continue to press on the homebuilding industry as builders frantically try to meet the surging demand for new homes since the pandemic.
Sales of newly built single-family homes in February plunged 18.2% month over month to a 775,000 seasonally adjusted annual rate, the Commerce Department reported Tuesday. This marks the lowest level for new-home sales since last May.
“Though buyer traffic remains strong, some homebuilding activity is being delayed due to material shortages,” says Chuck Fowke, chairman of the National Association of Home Builders. “This is forcing builders and buyers to grapple with rising affordability issues, as soaring lumber prices have added more than $24,000 to the price of a new home.”
Homes available for sale that have not started construction surged 67% over the last year. That is an indicator of increasing delays and higher costs associated with construction, the NAHB notes.
“While rising material costs and other supply-side issues are causing delays for some projects, other factors contributing to the slowdown include the winter storms in areas like Texas andrising mortgage rates, which are up more than 30 basis points over the past five weeks,” says Robert Dietz, the NAHB’s chief economist.
New-home prices also continue to rise due to material costs, notably from increases in lumber prices. The median sales price for a newly built home was $349,400 in February, a 5.3% increase compared to a year ago.
