Just five short months ago, 30-yr fixed mortgage rates were below 3%. Six weeks ago, they averaged under 4%. This past week, they are sitting at 5.20%.
Interest rates coupled with inflated housing prices have caused homeownership to recently become very expensive… especially for young buyers who have seen nothing but cheap money their whole lives. Some of us older folks can remember the 1981-82 recession- worst economic downturn in the United States since the Great Depression. Job losses were felt acutely in the goods-producing sector i.e., manufacturing, residential construction industry and auto manufacturers. The Fed responded by restraining growth in money and credit to counteract hyperinflation. The year 1981 actually made mortgage interest rate history at 16.63% (Freddie Mac). Unless you were paying cash, buying a home in the 80’s was seriously expensive.
Today? With inventory low and creeping interest rates, people feeling the effects of $6/gallon gasoline and looking for ways to reduce the commute are playing financial gymnastics. Backing out of a locked in sub 3% fixed rate mortgage requires serious consideration. Rollover your sale price to what?
To make matters more complicated, more than 45 million millennials will enter the housing market this year being of prime first-time home buying ages between 26 and 35 years old. Finding properties that are affordable will be a significant challenge for this group.
Looking for a new home? Don’t immediately discount the listing that needs a little TLC. Affordable properties usually mean need updating… and that is an area where it pays to do your homework. Consult businesses that are upfront and honest about supply chain issues and how your project will be affected both in time to finish and price for materials. Home renovation costs can vary significantly based on materials, their availability and good project management. And yes, AKB will provide you with the information you need to guide you through your options.
Protecting your walls from cooking splatters and steam can be easily accomplished by using any stone or tile backsplashes. However, in the right kitchen design, don’t miss an opportunity of creating something special behind your range! Tile designs using different colors, shapes and sizes, colored grout or actual artwork can create the perfect focal point, adding visual interest and dimension to your kitchen. At AKB, we can help you decide whether a soothing monochromatic scheme works best or something that draws the eye! Here are a few “focal points” from our portfolio! Talk to us about what works best.
Requiring people to be in the office was easy in 2019. But in 2020, when businesses were allowed to open back up after the lockdowns, many employed a hybrid model in their organizational and workforce strategy. This was largely due to being the most feasible way to comply with social distancing protocols. Companies could either space people out by rearranging existing office furniture or reduce the amount of people in the office. If there were space constraints, the hybrid work week (where employees blend their time working from home and in the office) became the go to strategy for companies during the transition period. Apparently, it worked very well… too well. It’s now 2022 and studies suggest that a hybrid work model may be here to stay.
People enjoyed working from home. They liked not having to commute, dress up or adhere to any forced office schedules. Workers claimed to be more productive which was music to companies’ ears. Employees were evaluated entirely on their results, not just on the empty optics of clocking in time at the office.
According to a recent Harvard Business Review study, 76% of current workers have no intention of spending 5 days a week in a company office space. And companies are taking notice. Hybrid working arrangements are helping in company recruitment. Luring top talent with flexible work arrangements has become all too real.
How has this change affected AKB? Custom home offices! Stylish office designs with beautiful hardware and shelving create the perfect, professional looking office background appropriate for every Zoom meeting. Customized storage to have all your supporting documents handy are must haves. So many options to consider that are so professional, you could likely wear head-to-toe pajamas and no one would even notice. At AKB, our designs are all about whatever makes your life easier and more enjoyable.
Pre-pandemic, household spending on eating out was trending upward, according to the Bureau of Labor Statistics. In 2017, Americans spent $3,365. In 2018, $3,459. In 2019, $3,526. However, due to Covid and the ever-changing restaurant regulations, 2020 spending dropped to $2,375. That aside, the ten years leading up to 2019 saw food and drink sales reaching over 773 billion U.S. dollars. Eating out was fast becoming a staple to the American diet before Covid came along. Has that changed? I predict that 2021 will show a nice recovery large in part as a show of support to one of the hardest hit service industries. However, some pandemic trends may be here to stay.
Looking for activities to pass the mundane hours of stay at home orders, cooking for the family became fun again! A well-appointed kitchen with professional-grade appliances and storage areas for specialty items and equipment were on must have lists. Planning and preparing the evening meal could involve the whole family! Specialities were claimed and signature dishes developed. “We’re having Eleanor’s famous apple pie tonight!” Ever seen the movie Kate & Leopold? My favorite scene shows Leopold sadly gazing at his pitifully unappetizing dinner and musing,”Where I come from, the meal is the result of reflection and study, menus are prepared in advance, timed to perfection. It is said, without the culinary arts the crudeness of reality would be unbearable.”
Welcome the Foodie in 2020 and beyond. A gourmet or foodie doesn’t see food as a means to an end. Food is art, edible luxury. Social media accounts are rife with examples. The experience of eating, making, or displaying food during the home-bound time during the pandemic spawned new cooks eager to create something picture worthy. Not a bad thing when you realize that to make a profit, restaurants charge about a 300% markup on the items they serve. You’re paying for service and convenience. In many cases, you could make a $15 meal in a restaurant for $5 at home with a little time and effort.
Who is willing to still pay for this convenience? Analyzing the demographics of “Food Away from Home” showed distinct patterns across generations regardless of the year. Members of the Silent and GI generations were not the big spenders in this category. Whether it was dietary concerns or mobility issues, age-related health constraints were factors. Additionally, as a generation raised during a period of war and economic depression, they tend to view eating restaurant food as a luxury.
Making up the largest percentage of Americans that eat out are the younger generations, spending 44 percent of total food expenditures on food away from home. Convenience is the name of the game for these folks. The rise in smartphone food app users and food delivery services have a lot to do with the explosion, especially during the pandemic. Take for example the Millennials, aged 26-41. This tech comfortable age group cut the cable cord early adopting to on demand streaming services. They choose access over ownership, often delaying big purchases for “right now” conveniences. Ever look for wedding gift options in their registry? So much for the cooking gadgets, high end coffee machines usually make the top of the lists I’ve seen! But there is hope for them yet. My youngest provided me this image from a recent visit with friends. Home made pasta. I’m thinking the time to prepare and make was worth the effort. “Buona Mangiata”
We’ll explore more about this topic and age related viewpoints in future blog posts. 🙂
Popular media would have us believe people left in droves from their complicated big city lives to small town simplicity. Fleeing the restrictions imposed by “those in charge” of the pandemic response, one imagined a mass exodus from cities across the nation to quaint cocoons of small-town life, blessed with open space and salubrious living. Interestingly, data suggests that people moved, but not permanently, or not in the numbers imagined. Industry magazines cite “the long-standing trend of people moving out of the expensive, high-tax states to lower price, lower-tax states.” This was certainly evident in New York County which covers Manhattan. Data showed a significant number of New Yorkers moving to the New Jersey suburbs or to the sunnier state of Florida fueled by PCR- Pandemic Controlled Retirement (those forced to retire due to Covid policies and restrictions) or just a good ole quest for an easier lifestyle and lower taxes. In the words of my children in reference to deep philosophical meaning, “no duh”.
So what are we to glean from this? According to USPS data, 2018 and 2019 saw 2–3 million temporary moves and 31–33 million permanent moves (including individual, family, and businesses). Despite spikes, moves have remained within this typical range since the start of the pandemic, so nothing really to note as significant. Those that had jobs that could be done anywhere benefitted. Customer service representative taking calls and logging data in a cramped downtown apartment or sitting on the pier overlooking the water? Cold calling for sales appointments from your bedroom or on the beach? Maybe you’re snowed in helping customers in Chicago but would rather be ready to clock out and ski down the slopes of Vail or Breckenridge. Individuals and even families who had the freedom to change locations during the work at home orders made geographical upgrades to suit them. Janitorial services to clean spaces? Hostessing and food service? Mechanics and Technicians? Salons and Spas? Employment in these industries weren’t so lucky.
A Pew survey in October 2021 found that “pandemic movers” relocated temporarily and eventually moved back to the home they had occupied before. Interesting. Sounds like everyone trying to make the best of their personal situations and keeping it fluid. At AKB, we completed more projects during the pandemic than in any of our last 15+ years of business including many transplants to our area. Central Kentucky is a pretty good place to live.
2020 taught us one thing, to value useful space. People spent a lot of time inside their homes last year. Correcting insufficiencies in home designs became priority #1. Clients came to us wanting everything and anythin
g they had heard about or seen online that appealed to them. Materials like copper, brass and bronze, which have natural antimicrobial properties, were popular requests. Smart homes and appliances with touch-free capability sounded ideal to the tech savvy. Open concept rooms, popular in previous years, were less desirable when multiple family members needed to have dedicated spaces while working from home. Trying to participate in a conference call while your kids were on all-class Zoom meetings was a real struggle. The dining room table and kitchen island became a workstation for one, if not two people.
Where were you supposed to work out? With gyms closed for months, at-home workout systems became key. (Peloton bike sales soared) The idea of a home gym became popular again! Bringing the outside in was also a hot button. Designs that included semi-closed spaces, window walls, sliding glass doors and reflective surfaces all played key roles in the desire for bright, nature-positive spaces. Real estate listings were quick to tout a property offering “great alfresco dining area”. Pricing and availability took some air out of the tires for many of these requests, but the interest was duly noted.
Key take away is this… design has always been personal, but post pandemic, optimizing your live/work spaces just makes good sense. Interested in remodeling? We can help. Call us at the Little Yellow House of Big Ideas.
Q: Supply Chain Shortage Affecting the Housing Industry?
What’s the deal with lumber prices? The internet is ripe with lumber price memes. Cost of lumber and other construction materials coupled with the lack of skilled workers has caused a drop in housing starts. No surprise. News reports show cargo ships waiting to dock and criticize our reliance on foreign products. I’d say, “hold that thought”. Many products labeled “Made in the USA” are still reliant on pieces or chemicals made abroad. As stated in a previous blog, AKB cabinetry suppliers are American companies that have stayed in production without any interruption. Their dependence on overseas suppliers to create quality, price effective product is kept at minimum.
The cost of real estate has risen to record highs according to published reports from Fannie Mae. 2022 is projected to cool off but prices will still be sitting at record highs. Potential sellers eager to fetch top dollar for their homes have had to consider what they could afford on the other side. Interest rates at historically low levels are almost a wasted opportunity for many people. Mortgage Banking Association predicts that interest rates will rise to over 4%, but consider:
In 1981, the annual average was 16.63%. (Sobering)
30 year loan for 100k at 16%= $1345/month (484,112 Cost) vs. 30 year loan for 100k at 3%= $422 (151,777 Cost)
Safe at home strategies morphed into ENJOYING being safe at home. “Flush with stimulus checks and all the money they saved from not going out or on vacations, Americans stuck at home decided to fix up their abodes.” A further observation: The pandemic remodeling rush was also fueled by people wanting SOMETHING TO DO.
Here we are 20 months into this ordeal and AKB is still meeting client expectations. Our suppliers are working hard. Our installers are working hard. Our designers are working hard. Call us at 859.268.0800 if you’re contemplating a remodeling project.
Around the country, cargo ships are sitting in holding patterns being denied port entry and causing product shortages in most all industries. (Ask anyone who has tried to order furniture or appliances in the last months!) The bottleneck situation has prompted the White House to warn Americans that this holiday season will be difficult with order delays or product shortages. HoHoHo or NoNoNo.
The Supply Chain Disruptions Task Force has attempted to address the issues in the short-term and isn’t looking to government to resolve the problems. “The supply chain is essentially in the hands of the private sector, so we need the private sector to step up to help solve these problems. Three of the largest goods carriers in the country, Walmart, FedEx and UPS, will make commitments towards moving to 24/7, working during off peak hours” a senior WH administration official said on Wednesday. Florida is leading the way to a possible solution. The Sunshine State has put out the word that they are open and ready for business. Port workers are available for off loading and distribution across the country. Let the trucks start rolling!
How has this global situation affected AKB? Thankfully, AKB represents two family run cabinetry companies that have remained open for business during this entire pandemic and able to process orders. The only real set back has been managing extended lead times. This required extra finesse coordinating with construction teams to have spaces ready for cabinet installation, templating and countertop installation. AKB Captain, Brent Richards, may have added “transportation provider” to his job description and rent a truck a couple of times to pick up cabinetry orders, but we always met our obligations. Hardware never seemed to be a problem and was generally received without issue. Appliances were often the hold up for a finished project but nothing that stopped cabinetry and countertops from being installed.
Everyone has had to pivot and effectively manage their businesses these days. AKB is managing beautifully. Let’s hope that the holiday season experiences the same.
The sink, the stove and the refrigerator make up the concept of the kitchen “work triangle”. The proximity of these three items is a consideration when designing new spaces and creating focal points. Custom hoods above an oven… or statement sinks? The choices are based on the overall design goals. If your design leans toward a centralized sink, picking just the right material to accommodate your look and lifestyle is key. AKB’s showroom has several examples of top rated options for clients to explore!
Stainless steel sinks are the dependable workhorse of sink options. Our custom made 3 compartment sink and countertop was designed for our practicing chef, Phil Dunn, to accommodate his popular cooking classes. Not a chef? Come see one of our stainless steel favorites, the Kraus Work Station Sink. This nifty option offers an integrated ledge that allows you to work directly over your sink. Accessories slide across the built-in ledge saving space on the kitchen counter. It is wonderful and well-priced.
Silgranit sinks are durable and attractive. They are made of up to 80% quartz sand, the hardest element of natural granite. We elected to install a café brown one in a working sink to show client’s this option. The BLANCO version is offered in 9 different colors and features over 300 exclusive sink designs for you to choose from. Modern farmhouse styles and spacious under mounts in striking hues will make a Silgranit sink a dependable and stunning statement piece.
Farmhouse sinks are a customer favorite. We recently sold our Kohler cast iron farmhouse sink to a lucky buyer when we remodeled our front display. It was a timeless, white version with a smooth glossy finish. Cast iron sinks are easy to clean but you need to be careful not to damage the enamel surface with abrasive cleaners. Fireclay sinks resemble cast iron and resist stains and scratches better. Like the cast iron versions, these sinks are heavy and need to be installed on quality cabinets with weight reinforcement.
Although not on display in our showroom, other options to consider are:
Copper sinks- pricey but distinct. They are antimicrobial and thick quality options are durable and resistant to denting. Note: Time changes the patina so make sure you’re ok with the aging look.
Solid stone sinks- typical granite and marble options are pricey but timeless. They are extremely durable, especially when sealed regularly.