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AIA Reports That Residential Architecture Revenues Show Signs of Improvement

Business conditions stayed weak through 2009’s 3rd quarter for housing design architects, yet specific segments at the market’s lower end look ready for a 2010 recovery, according to fresh numbers from the AIA.

Since the billings for architects are usually a good prediction of future activity in construction, this could be good news for homebuilders.

Design work for affordable homes for first-time buyers jumped from -64 percent in the third quarter of 2008 to -2 percent in a year over year comparison, according to architects responding to the latest AIA Quarterly Design Trends survey. (Percentages indicate the number of respondents reporting sector ‚improving‚ minus the number reporting ‚ aweakening.‚)

The feeling towards the move-up market had an improved gain that traveled from -57 percent down to -29 percent within the same time frame.

Each market segment has been boosted through decreasing home costs and good mortgage rates. AIA cheif economist Kermit Baker noted the kick-start the affordable market received from such aid as the federal tax credit for those purchasing a home for the first time.

The third quarter of 2009 showed strong gains in remodeling activity, with 27 percent of architects reporting an increased demand for both renovations and additions, up from 13 percent in the year prior. Kitchen as well as bathroom remodeling jobs increased by a very large percentage, from approximately eight percent during 2008 to approximately twenty six percent during 2009, an increase of more than three times the percent for one year.

Additional market segments have not been as fortunate. The townhouse/condo market remained stagnant, with a score of -43 percent in 2009 vs. -49 percent in 2009. Interest in custom/luxury homes and second vacation homes remained extremely low, at -48 percent and -70 percent, respectively.

Through the third quarter of 2009, the AIA‚Äôs residential billings index rose sharply from a score of 20 in the fourth quarter of 2008 to 38 in the second quarter of 2009, but then remained flat at 38 overall. Individual scores not above 50 are indicative of negative activity, however “less bad” categories are those that show scores that are ten or above.

Moving from a score of 35 in the first quarter of 2009 to 47 in the second quarter, new project inquiries at architecture firms remained similarly meager last year, but inched closer to the halfway mark.

Geographically speaking, reports from architects suggest that recovery will be concentrated most heavily in urbanized areas. Some 69 of respondents in the latest survey indicated a rise in demand for infill development, up from 63 percent in 2008.

The source of this article is Builder Online.