The proposed condominium parcel in Summit, N.J., came with an “A” location: Steps from a train station, 30 minutes to Manhattan, and a two-block walk to Summit’s desirable downtown. It also included something that, at the time, seemed of negligible value to home builder Michael Markovitz, a list of locals who were interested in the project.
“We didn’t pay any extra for the list,” quips David Schoner, vice president of Coldwell Banker’s new homes division, which handles sales and marketing for Markovitz’ Mark Built Homes. Yet, in the end, it was the list that played a big role in the project’s eventual success.
It was 2008, Markovitz was the third builder under contract to buy the infill parcel as it worked its way through a five-year development approval process, and he was beginning to doubt his wisdom.
“The economy was in shambles,” he says.
“The market had already gone very wrong,” agrees Schoner. “It was giving all the wrong signals. Values were falling, banks were leaving the [home building] business. There were other projects in Northern New Jersey trying to sell luxury condominiums, and none of them were selling well. Values were going down. Why do we want to join the party?”
But the price was right, half what it first was marketed for, and there was that “A” location, so in 2009 Mark Built closed on the parcel and started considering product details. Given the fact that the market’s dire straits left him with little margin for error and Summit Place’s price point is on the high side for the location, Markovitz thought it prudent to research what home shoppers wanted before putting pencil to paper.
“We were not so egotistical that we thought we understood what people would want,” says Markovitz, a Cornell/Harvard-trained architect as well as builder.
So in 2009, two years before the project that would become Summit Place began sales, Coldwell contacted all 75 people on the list of interested local residents inherited in the land buy, inviting them to give their input into the project. Twenty-four envelopes came back, and Coldwell Banker had a focus group.
“We needed to absolutely drill down and rent some space in their [potential buyers’] heads to find out what we could do to meet with the best level of acceptance as possible,” Schoner says.
For a year, the 24 household groups met on and off on Saturday mornings, reviewing and offering input on everything from floor plans to faucets.
One thing in particular became clear from the focus group research, the process of picking and choosing interiors was a source of stress for the home shoppers. So Mark Built Homes, with its interior consultant Lita Dirks & Co., used the input to devise seven different interior packages that buyers could choose from. No mixing and matching among the packages was allowed, eliminating the stress and worry of choosing individual components and allowing the builder to somewhat standardize components.
Sometime during the focus group sessions, half of the participants moved from being mildly interested construction consultants to home buyers. Twelve of the 24 condos sold in Summit Place’s first year were bought by focus group members. Only one unit in the first phase of 25 condominiums remains unsold. And the builder has a waiting list of 11 for the 15 units in the two other project phases still to be built.
“We had people who were emotionally invested [in the project],” says Markovitz. After all, they had chosen the fit and finishes and floor plans. “They liked it and bought it.”
The intensive process of picking potential buyers brains wasn’t cheap, and it was time consuming. “But not as costly as opening to a crowd that doesn’t come,” says Schoner.
Learn more about markets featured in this article: New York, NY.