December 2, 2019

After a 2019 in which the Federal Reserve lowered interest rates three times, refinancing activity surged and home prices continued to rise while existing-home sales began to fall, real estate experts are looking ahead to 2020 with cautious optimism. The National Association of Realtors (NAR) is forecasting continued economic expansion and a stable housing market next year, with a 3.7 percent rise in existing home sales. Meanwhile, Dodge Data & Analytics predicts new-construction single-family housing starts to have a modest 3 percent decline.   

“As the Fed continues to combat a slowing world economy, we anticipate that interest rates will remain low and the U.S. jobs market will stay strong, creating a conducive climate for homebuying next year,” said Paul Lueken, CEO of Draper and Kramer Mortgage Corp. “Loosened rules on FHA loans and pent-up demand from millennial homebuyers should also help usher in a bigger wave of first-time buyers in 2020 than what we saw in 2019.”

Against the backdrop of anticipated steady, yet relatively flat, market conditions, here are some of the trends expected to impact residential real estate in 2020, according to leading Midwest experts.

Gray is Passé and Black is Back
For years, gray has reigned supreme among designers and homeowners alike as a go-to neutral. But, according to a recent survey of professional interior designers by Sherwin-Williams, the color gray may be fading to black. When asked which colors they consider to be neutrals for 2020 and beyond, two-thirds of the designers surveyed said black.

At Lexington Village at Avondale, a community of 22 attached single-family homes on Chicago’s North Side, builder Lexington Homes recently unveiled a decorated model that’s a study in black and white. Not only does the model’s kitchen feature black-and-white tuxedo cabinets, but the master suite also plays into the color scheme with a black-and-white wallpaper ceiling treatment, black crown molding and a master bath showcasing white cabinetry with ebony quartz countertops.

“In doing our research, it felt like gray had been overdone – we wanted a model that looked fresh and inspiring with an urban sensibility,” said Jeff Benach, principal of Lexington Homes. “Similar to gray, a black-and-white color palette can work with almost any other shade for nice pops of color; plus, it’s gender neutral, so it appeals to everyone.” 

“I won’t say gray will ever go away, but it doesn’t look as ‘new’ as black going into 2020,” said Elissa Morgante, founding partner of Chicago-based architecture and interior design firm Morgante Wilson Architects. “We’re seeing a trend toward more adventurous choices such as special dark, monochromatic and very saturated wall colors. Black certainly fits into that category, and it can be very dramatic, classic, casual or modern depending on how it’s used. There was a long period of time where people were intimidated by black or thought it was too goth, but that’s not the case anymore as they’ve seen – either through magazines, TV or the internet – how it can be used as a neutral to ground a space. We’re using it everywhere from whole rooms and accent walls to black-stained floors, cabinetry and trim.” 

Kondo’d Kitchens
As busy homeowners try to simplify their lives, many are turning to principles espoused by tidying expert Marie Kondo – namely, that homeowners discard items that no longer “spark joy.” But some are taking Kondo’s mantra a step further, especially in the kitchen, where appliances are being concealed or, in some cases, removed entirely to achieve a more minimalist design in which less is more.

At Cirrus, a luxury condominium tower under construction along the lakefront in Chicago’s Lakeshore East neighborhood, developer Lendlease has taken into account that residents – particularly downsizers and second-home buyers – aren’t viewing the kitchen as a space that will host large holiday gatherings. For special occasions, they can simply invite guests to the tower’s 41^st floor, which houses separate prep and demonstration kitchens, adjacent dining and seating areas, a wine cellar and tasting room, and east-facing balcony overlooking Lake Michigan.

“When planning the smaller kitchens at Cirrus, we eliminated the stand-alone microwave oven, opting for a speed oven/wall unit and also went with an integrated appliance package to strike a balance between functionality and design continuity,” said Linda Kozloski, creative design director at Lendlease. “In plans featuring open kitchen and living areas, buyers appreciate the simplicity so that the kitchen doesn’t detract from other areas of the home or, in the case of Cirrus, the sweeping lake and city views.”

Goldilocks Floor Plans
Buyers who have been saying “too big” or “too small” in recent years are finding their “just right” in 2020 thanks to a greater variety of innovative floor plans being offered by homebuilders and multifamily developers.

 At Cirrus, a 47-story, 363-unit luxury condominium tower in downtown Chicago, buyers can choose from one-, two-, three-, and four-bedroom condos, as well as townhome and penthouse residences. The homes range in size from 650 to over 3,000 square feet and are priced from the mid-$400,000s to over $4 million.

“We programmed smaller plans into our unit mix because, during this housing cycle, virtually all of the new construction has been larger units at higher price points,” said Ted Weldon, executive general manager at Lendlease. “Yet we’ve seen that even among buyers who can afford a three- or four-bedroom condo, some don’t necessarily want that much space. At Cirrus, we’re able to accommodate those in search of a full-time residence in a prime lakefront location, as well as those who need only one bedroom, whether they’re downsizing from a single-family home, trading up from an apartment, or simply looking for a second home in the city.” 

Buyers seeking the privacy, square footage and neighborhood location of a single-family home, but without the upkeep, are finding new maintenance-free options in developments like Lexington Village at Avondale. The community of 22 attached single-family homes in Chicago’s Avondale neighborhood offers a brand new “hybrid” concept created by builder Lexington Homes. Measuring 2,300 to 2,450 square feet, plans combine elements of townhome and single-family home design, with three levels of living space plus a rooftop deck, as well as a fenced-in back yard and detached two-car garage.

“These three- to four-bedroom homes have features you won’t find in a typical city residence, such as two private outdoor spaces – one with grass at ground level, and another higher up that offers skyline views,” said Jeff Benach, principal of Lexington Homes. “Plus, the homes have generous rooms on each level, including several large bedroom suites with oversized baths and walk-in closets.”  

 More traditional detached single-family homes are evolving, too. Builder Red Seal Homes recently introduced a new product line, The Chateaux, at Provenance, its community of single-family homes, duplexes and townhomes in the Northbrook area of Cook County, Ill. Smaller than the community’s existing single-family home plans, The Chateaux is available in both ranch and two-story designs, with the capacity to range from 2,217 to 3,606 square feet. 

Generation Renovation
With home sales slowing in many parts of the country, a new niche has emerged: firms offering light renovation services to help sellers achieve their best sale price before listing their home.

Leading this charge is Renovation Sells, Chicago’s presale home renovation expert that works alongside Realtors and homeowners in making minor renovations for major ROI. “In today’s market, most buyers want a turnkey home that’s Instagram-worthy, but sellers often struggle with what that looks like. Knowing what to do first is the biggest challenge for sellers – and Renovation Sells aims to simplify that process,” said Michael Valente, managing partner for Renovation Sells. “We are a design-focused, all-in-one resource that can deliver the look that makes the best first impression with buyers, both online and in person, ultimately resulting in quicker and higher-priced home sales.”

According to Valente, the firm’s average project takes 21 days, costs around $20,000 and sells within 28 days of being on the market. 

In agreement that light renovations can make a big difference – and be a big business in 2020 – is Ben Creamer, co-founder and managing broker of Downtown Realty Co., a brokerage firm specializing in luxury rental and for-sale residences in downtown Chicago. “Usually, our first advice to sellers is to repaint in a neutral color,” Creamer said. “But kitchen updates, like adding a backsplash or switching out countertops, can pay the biggest dividends, reducing market time and resulting in a higher price. Unless a seller is super handy, those high-return projects typically require a contractor to get it done right.” 

Foyer Frenzy
The average entry foyer measures just 86 square feet, or 3 percent of the space in a typical new home, according to a recent study from the National Association of Home Builders. Historically more utilitarian than opulent, foyer designs are changing as developers and homebuilders – and discerning buyers – look to create that all-important first impression. 

In condominiums developed by Belgravia Group, foyers not only serve as a point of entry, but also highlight other features of the home’s design. For example, at Renelle on the River, Belgravia’s 50-unit luxury condominium in Chicago’s River North neighborhood, one plan situates the foyer to showcase stunning views of the famous Wrigley Building and Michigan Avenue. In others, Belgravia allocates space for wall art and additional statement pieces.

“The foyer is often overlooked in condominium design, but it is one of the most important elements of a floor plan because it evokes a grand sense of arrival,” said Liz Brooks, vice president of sales and marketing for Belgravia Group. “Buyers, especially those opting for a condominium in lieu of a single-family home, appreciate having a dedicated entryway that allows for a more graceful, defined transition to the rest of the home.”