Wellness real estate projects emphasize indoor-outdoor connections.
Public awareness of the links between our homes and our health was growing before the pandemic, but it has exploded in the months and years since then. What will the many built-in wellness design improvements we’ve added in recent years do to enhance our homes’ value to prospective buyers? Which ones are builders prioritizing in their new construction projects?
Macro Trends
“In the current price-conscious market, we are seeing those ‘will they pay for it” conversations arising again,” shares Mikaela Arroyo, New Home Trends Institute director at John Burns Real Estate Consulting. “With less buyer demand, builders are looking for ways to differentiate themselves that don’t break the bank (think smart tech, health, energy efficiency). We are seeing a careful curation of the features that bring the most ROI to buyers,” she adds.
“We recently surveyed homeowners and single-family renters with household income of $50K+, and we found that almost all (93%) say that wellness is important to them,” Arroyo says, revealing that there’s buyer confusion about the benefits of particular features and affordability challenges.
While less than half (43%) of respondents said health impacts were a factor in choosing their current home, “73% say it will be a factor in selecting their next home,” Arroyo reports. She sees the only ‘must-have’ wellness feature at the mid-priced real estate level being a connection to the outdoors. Air filtration is a strong priority for this segment as well.
“As wellness features become more desirable and accessible at all price points, they will increasingly become part of that standard package of features considered part of a ‘nice home,’ as opposed to niche features only seen in luxury homes. I think we’re headed in that direction in 2023,” predicts Amanda Pendleton, home trends expert for real estate platform Zillow.
In Demand Features
“We’re seeing a 15% increase in the number of for-sale listings mentioning wellness compared to last year. We’re also seeing significantly more mentions of non-toxic materials, anti-microbial surfaces and anti-bacterial features like touchless toilets pop up in listings today compared to just a year ago,” Pendleton adds.
“The share of listings that now mention non-toxic materials has climbed 55% since a year ago. Antimicrobial surfaces were mentioned 44% more often in listing descriptions compared to last year. Saltwater pool (considered a healthier alternative to a standard chlorine) mentions have increased 35%,” Pendleton reports.
How do these translate into sales premiums? “Listings that mention quartz countertops can sell for 2.3% more and two days faster than expected. Anti-bacterial features such as smart touchless toilets and touchless sinks can [help a home] sell for 0.7% more than expected. Homes with a meditation room can sell for 1.7% more than similar homes. Homes with a saltwater pool command a 2.1% sale premium,” Zillow research shows.
Luxury Market
Dayson Johnson’s projects are filled with premium wellness features for premium homebuyers. As vice president of Magleby Development in the Park City, Utah area and a member of the Urban Land Institute’s Residential Neighborhood Development Council, his firm is developing Velvære in the Park City area to offer what the developer describes as “transformative hyper-wellness experiences.”
There are 115 planned residences and community-wide wellness features planned for the 60-acre site. Homes slated for early 2024 completion range from $4 million to 12 million. As Arroyo pointed out, that indoor-outdoor connection is crucial. So are the home’s systems, a shift from past years, Johnson says.
“Today, our mountain clients all request the ability to oxygenate primary bedrooms and we are installing circadian rhythm systems in more and more homes.” Sustainability with solar and backup batteries are also strongly requested for both resilience and climate concerns, he adds.
Floor plans have evolved too, with an emphasis on multi-functional wellness spaces. Johnson describes them as areas “where you can do yoga, get an in-home massage, ride the Peloton or whatever else suits your need to find peak performance, recovery and mental peace, and have your own personal retreat within your home.”
While Johnson’s long-term goal is to expand into a variety of locations and price points, he says, wellness has always been a luxury good. These homes are low in supply and high in demand, he observes. Paul Scialla, CEO of the wellness-focused technology, design and real estate firm Delos, and founder of the International WELL Building Institute, agrees: “Buyers are willing to pay the premium for wellness real estate, which averages 10 to 25% higher than traditional real estate.”
Wellness Technology
Beyond the awareness of a home’s ventilation systems for virus spread that was created by Covid, “homebuyers now have a better understanding of dangerous pollutants and chemicals,” notes Scialla. He predicts that air purifying technology sales will double globally by the end of the decade, with the U.S. remaining a dominant market.
“In addition to air purification, there is significant interest in water filtration and dynamic lighting solutions,” Scialla adds. “As more millennials and Gen Z enter the housing market, these technologies and automations will be in even higher demand.” At the moment though, these wellness-focused younger buyers are struggling with affordability challenges, so their impact will likely be delayed.
“As is the case with most technologies, as market adoption accelerates, they become much more accessible and affordable,” the technology executive shares. “We’re now seeing just as much demand for key wellness features in standard single-family homes, multi-family housing and, most recently, in the build-for-rent market.”
Last Words
“If you’re listing your home for sale and have wellness features, you’ll want to flaunt them in your description and highlight them in your photos. These features are increasingly desired by today’s home buyers, so make sure you’re showcasing all the ways your home can support well-being and healthier living,” recommends Zillow’s Pendleton.
“Healthy home features create a massive opportunity for home builders in the wake of a slowing market,” Scialla comments, noting that “59% of consumers will pay a premium for a wellness-oriented solution versus a non-wellness offering.” What are you offering them?
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Author’s Note:
Contributors Arroyo, Johnson, Pendleton and Scialla will be sharing more ROI insights in an hour-long Clubhouse conversation tomorrow afternoon (January 18, 2023) at 4 pm Eastern/1 pm Pacific. You can join this WELLNESS WEDNESDAYS discussion here. If you’re unable to attend, you can catch the recording via Clubhouse Replays here or the Gold Notes design blog here next Wednesday.
