Housing Trends Reflect Pandemic’s Influence  

The effect of pandemic lockdowns has triggered more interest in working at home, a trend that will be long-lasting and possibly permanent.

Early in the pandemic we saw a surge in real estate activity as buyers sought more space for working from home. Compounding that was a desire for more at-home entertainment and exercise. People want not only a home office, but a home theater and a home workout facility. These are features that will, in my opinion, dominate home design and buyer demands for at least the coming decade.

People feel safer at home, but they don’t want to feel cloistered. They want elbow-room.

Lockdowns also triggered more separations and divorces as couples who weren’t really in love found that being cloistered together at home didn’t work for their relationship. This also contributed to the real estate boom of 2020 and into 2021.

Real estate was considered an “essential service” in the early days of Covid-19 lockdowns, and we Realtors certainly relished the lack of traffic and traffic jams on local highways.  Those days of free-flowing traffic may be gone, but there is still a widespread appreciation of working from home and doing less commuting. This means continued buyer activity focused on finding additional home office space.

Some homeowners are finding that additional space at home instead of trading up to a bigger home. There’s increased interest, for example, in building ADUs over detached garages, not to create rental income (a great idea) but for the homeowner’s own use as a studio or office away from family distractions.

An attached garage can offer great potential for additional living space, not just as a workshop, but as a home office, art studio, workout room or even a bedroom if necessary. Heating and cooling, on top of improved insulation, will be job #1 before improving the flooring, walls and ceiling. Rather than extending your home forced-air furnace ductwork, consider installing a single-unit heat pump mini-split system.  I saw this on a garage in north Golden—a perfect application of this technology.

Click here for the Realtor Magazine article which inspired this article.

BONUS FEATURE:

Here’s an article submitted by Tina Martin about transforming your garage into a great work space:

Work-from-home jobs have become much more prevalent in recent years, with many people looking for remote opportunities or even starting their own businesses from the comfort of their houses. If you’ve just started working from home or are planning to in the near future, you’ll need a quiet, dedicated space for an office, and one place you may not have thought of to create a setup is your garage. With a few simple changes, you can transform this area into another room that comes with plenty of benefits–including more privacy and fewer distractions. You can also look for ways to make the transition to working from home a little easier at the same time.

Come prepared

If you’re going to be working from home at your own business, it’s a good idea to be as prepared and organized as possible to make the process a smooth one. This means taking steps to ensure that your company has all its bases covered legally, including creating an LLC so you can keep track of your tax responsibilities and remain in good standing with the IRS. A limited liability company comes with less paperwork and more flexibility than a corporation, so you can stay on top of things and run your business the way you want. Every state has its own rules for formation, so look up the steps for creating a Colorado LLC before jumping in.

Set up your workspace

Once you have the details figured out, it’s time to think about how to turn your garage into a room you can work in throughout the seasons. Of course, you’ll need access to wi-fi and electricity, but never try to handle electrical work on your own–hire a pro if you have to add wiring to your garage. If you already have wi-fi in your home, a simple and affordable signal extender could help you bring service to your new workspace. You’ll also want to make sure you have access to cool and warm air for the different seasons and that the garage is well-ventilated. Add shelving and a desk so you can keep things neat, and don’t forget to bring in a comfortable, supportive chair.

Let some light in

Once you know where your desk will be, think about how to make sure you have the right light for your needs. Many garages have overhead fluorescent lighting, which can be tiresome to your eyes for long periods of time. Look for a small lamp or two that will provide task lighting to the right areas and diffuse the overheads for your comfort. If your garage has a window, even better! Natural light is beneficial for working in an office because it can help to prevent disruptions in the circadian rhythm and boost your mood. If you don’t have a window, take breaks throughout the day and step outside for some fresh air.

Keep distractions out

Once you have your office space set up, it’s time to keep the distractions to a minimum. There are several ways you can achieve this, but you might start by replacing the garage door with a regular one that locks. Keep your new office space dedicated to business-only; the more it looks and feels like home, the easier it will be for you to put off work. It’s also a good idea to keep devices out of the space unless they’re necessary for your job.

Creating a home office out of a garage doesn’t have to be time-consuming or costly. With a few simple moves, you can turn this space into an entirely new room and give yourself the workspace you’ve always wanted in the process.

Home Buyers Have Widely Differing Needs and Motivations

During my two decades as a licensed real estate agent and Realtor, I’ve met and worked with a wide variety of buyers and gotten to know their varying needs and motivations. Allow me to share some of that with you. I’ve identified at least five categories of buyers.

First-time home buyers: This group has always enjoyed a wide variety of programs to meet their special needs. By the way, you are deemed a “first-time” homebuyer if you have not owned a home for at least 3 years.

The primary need for this group is obtainable financing. We can connect first-time buyers with lenders who require as little as $1,000 out-of-pocket to get into a home, and who offer classes for first-time homebuyers to help them succeed as homeowners.

The motivation to change from renter to owner is well understood. Homeownership is the number one method of wealth creation. Not only are the taxes and interest on your home tax deductible (with some limitations now), but your home may well appreciate in value as much as or more than what you pay for it each month. Then, when you sell, your capital gain on it will be mostly or entirely tax free. With such incentives, first-time home buyers are highly motivated and rewarded for buying a home.

Move-up buyers: Homeowners frequently need to buy a bigger home or simply want to buy a more luxurious one. Typically, this is when children are born or adopted, but with Covid-19 we’ve seen homeowners who need more space to work at home, not just temporarily but long-term. Employers have learned that workers can be highly productive working at home, and employees like the lack of commuting time and expense — but they need space for a home office.

Downsizing buyers: Empty nesters rattling around in 5-bedroom homes with lawns to mow and bushes to trim are wanting, if not needing, to have a simpler life in a smaller home — perhaps a “lock-and-leave” home where they can travel and not worry about their home while they’re gone. Many of these homeowners have long ago paid off their mortgages, or their mortgage is small enough that they can buy a newer, smaller home and live mortgage-free. Taking out a home equity line of credit on their paid-off home could provide the cash to buy the replacement home without a contingency on the sale of their current home, which also allows them time to transition from one home to the next. That’s just one strategy that I can share if you are in this group.

Investors: I don’t work much with investors, preferring to work with people who buy a primary residence, but I have broker associates with extensive experience serving this group of buyers. With the bidding wars going on currently, investors, especially fix-and-flippers, are having trouble buying homes with enough margin to make a profit on reselling them, but it can be done.

Relocation buyers: In this column last week I wrote about “climate refugees” relocating to Colorado from areas with high climate risks. Others move here for jobs or family. Such buyers need to find the right city, community and home to buy despite being new to Colorado. That’s where they need us the most. Yes, we can give them tours and answer their questions after carefully listening to their needs and wants. Before they even come to town, I like to send them listings and FaceTime them as I preview homes of particular interest. In just the past month I sold an Arvada listing to a couple from Minnesota and a Denver listing to a couple from Los Angeles. Both went under contract based solely on my video tours and only saw the home in person when they came for the inspection a week or so later. They could have terminated at that time, but they both loved the homes.  I love my job!