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Recession Could Bring Big Change in What Consumers Demand in New Homes

Certainly that would provoke NIMBY wars and would probably require changes to some local zoning laws, but breaking up homes into many units could be a way to preserve values if there aren't enough people willing to bear the burden of big-house upkeep by themselves.

However, Ed Hudson, director of market research for the National Association of Home Builders Research Center in Upper Marlboro, isn't convinced that tomorrow's home buyers will really go for less space. What he does see, already, is a noticeable push from buyers to get more quality for their money.

"The McMansion going by the wayside? Well, maybe a little, but the average size is increasing," Hudson said.

Surveys of buyers during this recession show that they want upgrades that signify lasting value. When buyers chose among free upgrades being offered by builders, their top choice was upgraded kitchen appliances, followed by granite countertops and then upgraded wood flooring.

Other features that tomorrow's value-minded buyer is probably going to go for include upgraded front doors made of wood or fiberglass (and stained to look like wood), replacing painted steel doors. The new doors will more likely have windows built in or running vertically beside the door frame.

"People are more into solid wood cabinets," Hudson said. Solid-wood boxes are sturdier than cheaper-grade cabinets framed with plywood or particle board.

Money spent building new houses will be put where buyers can see it--in stone or brick facades, for example. But, already, builders are cutting back on spending where it doesn't show. For example, as copper prices were soaring in recent years, builders shifted dramatically to water pipes made of PEX, a plastic. "PEX is now the most common water distribution piping in U.S. [new] homes," said Hudson. "It's pretty startling how rapidly it changed."

Hudson and McAlester agreed that energy efficiency is going to be a lasting concern of buyers after they return to the market.

"Homes will be built in a greener and greener manner to reduce long-term utility costs," McAlester said. "Cathedral ceilings are pretty expensive, at least in cold climates."

Hudson expects homes to have more energy-monitoring systems to help people track their use. There will also be more solar-powered systems to provide electricity and hot water.

In particular, he expects more use of geothermal heat pumps, which take advantage of the fact that a few feet below the surface, the ground maintains a stable temperature between 50 and 60 degrees throughout the year. These heat exchangers use that steady temperature to heat and cool air inside the home. The equipment can cost several times more than an air-to-air heat pump, according to the U.S. Department of Energy, but greater efficiency can mean a payback in cheaper energy bills within five to 10 years.

"People are a lot more somber in mood and a lot less exuberant about continuing growth in wealth," Hudson said.

It will be fascinating to see how our new neighborhoods change as a result.

This week's column marks the end of the Local Address feature. Elizabeth Razzi will continue to write about real estate and personal finance for the Post, and she will continue to welcome your comments and suggestions at Razzie@washpost.com.


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