Anje Jager/

Brooke Warrickis president and founder of Carmel Valley, Calif.–based American LIVES.

Energy efficiency, because most resales can’t compete with it.

Every new-home builder must ask the question, “How can I compete with the resale market?” since that’s where nearly all of the buyer activity is today. A recently completed study indicates that roughly three-fifths of shoppers prefer new housing, and the overwhelming reason is that new homes are more energy efficient. This is a significant competitive advantage that new homes can exploit over resales.

Fifty-five percent of buyers say they’ll pay more than $5,000 for energy features that can run the gamut from insulation and low-E windows to high-performance heating and cooling systems. But builders need to sell these innovative solutions to shoppers, preferably by directly measuring their homes’ energy bills to comparable older homes in the same neighborhoods.

Sixty percent of buyers also say they’d pay $2,000 or more for green features such as water-efficient fixtures and cleaner indoor air quality that, according to some surveys, are important to over 80 percent of all home buyers. Making homes greener can be as simple as using recycled materials, low-VOC paints, and even advanced framing techniques that reduce waste.

However, builders continue to be inconsistent, at best, in how they market and sell their more-efficient houses against resales. One good way is to compare your houses to Energy Star ratings, which is something that the vast majority of buyers recognize and trust. If your houses meet or exceed that standard, spell it out in simple terms so prospective buyers can understand the differences and similarities quickly.

Anje Jager/

Barbara Nagle Statleris president of Marketscape Research & Consulting.

Design, because it represents true innovation in a sea of sameness.

American consumers appear addicted to products that promise to be “different and better”—and home shoppers are no exception. A rebound in housing demand, especially among discretionary buyers, is contingent upon home design innovation.

We can learn a lesson from television manufacturers. Only a decade ago, in the face of flat sales and falling prices for conventional electronics, innovation, in the form of flat screen TVs, rescued the industry. Though performing the same basic purpose, customers perceived these “new” TVs as “different and better”; and those products commanded premium prices.

Brian Stauffer

We hear home shoppers across the country lament about seeing the same old new houses. And the fact is that the housing industry has offered few truly significant design innovations in the last decade. It’s no wonder that resale homes are formidable competition for new construction. By contrast, the marketplace is rewarding home builders whose companies have the courage to define and introduce genuinely innovative home designs. See The Irvine Co.’s 2010 New Home Collection as an excellent example of vibrant innovation in floor plan and home design.

The best innovations grow from defining unmet consumer needs—and meeting them in new ways. Changing American lifestyles provide ample latitude and fodder for the creative process. But let’s not confuse cosmetic refinements with fundamental innovation. Surface changes to interior design, fixtures, and finishes don’t fool consumers. These are “trick plays,” while true design innovation is a game changer.

Innovation feeds Americans’ insatiable appetite for “different and better.” True consumer-driven design innovation promises to reignite the fun and excitement of new-home purchases.

Learn more about markets featured in this article: San Diego, CA.