Pacific Ocean views from the third floor. A bowling alley in the basement. A super energy-efficient home at no extra cost. These are the kinds of extraordinary touches that result in a best-selling project today.
To make this very short list of projects that are beating brutal marketing odds, builders and developers need to absolutely nail the basics. It’s virtually impossible to outsell the competition, especially the resale market, without offering homes in choice neighborhoods where people really want to live. If only there were more “A” locations to go around.
But location is just the starting point. To sell five or more homes a month when others are lucky to move one or two requires providing something valuable, an extra touch, that can’t be found elsewhere. As Teresa Burney reports in her profiles of four bestsellers, along with others that we’ve saved for Builder Online, innovation is clearly the key to success.
Yesterday’s plans simply won’t work in today’s market. Evidence suggests that buyers will reject design flourishes that now look gratuitous—an oversized foyer, redundant living and dining spaces, and master closets big enough to land a plane. Instead, they are looking for evidence that the home functions as well as possible, both for them and future owners.
Best-selling homes today often dispense with formal living and dining rooms. They stress function in key workspaces, the kitchen and bath. They emphasize the rooms where people spend the most time, or quality time, over spaces that are just nice to have. And they confront rather than avoid the cost of operating a home after move in.
With all the resale options tempting new-home buyers today, it’s difficult to even give away a new home that isn’t in a great location. Yet companies that manage to acquire ideal locations can still hit the ball onto Waverly Avenue. Stanley Martin sold out in two months after it opened an 11-unit community in the close-in Washington, D.C., suburb of Falls Church, Va. Fulton Homes, even as it struggled to emerge from bankruptcy, is blowing through a series of luxury production homes at Monterey Bay, located within a mature master plan, Fulton Ranch, with great shopping and restaurant options. Half the buyers, marketed to through the Internet, come from a nearby Intel campus.
The same dynamic is in effect at Los Altos, a townhome project on the Irvine Ranch in Southern California that was selling at 20 a month during the first quarter. Locals know the schools are great there, two regional malls are nearby, and the community amenities are outstanding. Adding these ingredients to a price point that’s one-third below the last cyclical peak produces a powerful brew.
It almost goes without saying that without competitive pricing not even the best designs will move in today’s drowsy market. That’s why very few older plans make the grade. Home designs must be value-engineered to produce cost savings that can be applied elsewhere. That’s the only way that Meritage can offer green homes with a HERS (home energy efficiency rating system) of 25 and still sell the home at a competitive price.
The two condo projects we highlight this month are incredible case studies. Both broke ground at the worst possible time, near the height of the boom, with high underlying land values. Their banks pulled out or went under. But both managed to not only survive but prosper.
What lessons do Spire and 56 Quincy teach? For one, it pays to be ahead of your time, with green construction practices and cutting-edge amenities, especially when buildouts wind up being protracted. But also that well-conceived projects in killer locations—with views of the Rocky Mountains or within walking distance of The Miracle Mile—will persevere no matter what.
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