Nobody in the business of home building or advising home builders seemed to be willing to predict when the market will turn around at Builder and Big Builder’s Housing Leadership Conference in Chicago this week. They’ve been wrong too many times before. But there was plenty of advice about how to sell houses in the meantime.
Mind you, nobody said it’s an easy thing to get buyers to commit these days, yet there were those with success stories to tell and secrets to share.
Brooke Warrick, president of America LIVES, offered attendees insight into the brains of potential buyers today, and the news wasn’t good. People don’t think things are getting better; they’re worried and are buying burglar alarms and weapons to feel protected and chocolate to placate their worried souls, said Warrick at the Capitalizing on Market Research to Develop Innovative New Products session. And those negative feelings about housing are likely to be lasting. “It’s not cyclical. It’s probably seismic,” he said.
Warrick, like many session speakers suggested builders target women, who make most buying decisions, and 55-plus buyers, who have the cash. He suggests that builders use “trust marks” such as the Energy Star label and the green circular arrow symbol of recycling to attract buyers to product.
At the same session Barb Nagle Statler, president of Marketscape Research and Consulting, said builders need to get discretionary buyers back into the market again.
“There is not a product I can think of that survives without the discretionary buyer,” said Statler. To bring those buyers into the market she suggested builders need to inspire confidence that buying is a good idea when friends and relatives tell them it’s not; contrast their product to existing homes; and establish a connection between the buyer and the product.
While buyers prefer new homes, they are no longer enchanted with new neighborhoods. They perceive them as more troubled by foreclosures and unfinished amenities than existing neighborhoods where people bought their homes years ago and foreclosures are scarcer.
“The bloom is off the rose when it comes to new neighborhoods,” she said.
Contrasting the new product to the old and making it better is a way to inspire buyers. “Customers don’t make a change until they are comfortable that the alternative is different and better than other available alternatives,” Statler said. “Consumers say this is where builders are falling short.”
New product and neighborhoods with a sense of place are what buyers want, she said.
Speakers offered tips on how to find and build those kinds of neighborhoods buyers want in the Reengineering New-Home Communities session.
Peter Tremulis, managing principal of National Asset Management, suggested builders look for communities in areas where there are job formations, retool their products to appeal to buyers, and seek infill locations closer in to cities rather than greenfields a long commute from jobs.
Jeff Kaizer, vice president of sales and marketing for M/I Homes, shared a story about retooling an Orlando community platted for town homes into a single-family neighborhood that sold fast at high margins. M/I developed a 30-foot-wide product with backyards that buyers wanted and paid more for.
In the end, the community sold five months ahead of schedule, and with “margins that were the talk of the town.”
Kaizer suggested builders look to fill product gaps in markets and to “zag” when everybody else is “zigging.”
Well-known architects Carson Looney, principal of Looney Ricks Kiss Architects, and Dan Swift, senior partner for BSB Design, offered tips on designing homes that buyers want today in the Rethinking New-Home Design seminar.
Looney suggested homes should be designed inside-out, concentrating on floor plan, rather than outside-in, focusing on the elevation of the homes.
Essentials for buyers today are family entry areas from the garage into the house where backpacks and mail can be dropped. These areas function as “livers” filtering out the junk of the world before moving into the rest of the house.
Looney said buyers would rather have more closet space than large master baths with huge garden tubs. Closets are like cup holders in cars, essential to the happiness of inhabitants, and that having a house without a home office area is like “having a car without brakes.”
It’s the little practical things, rather than the visual “sizzle,” that attracts buyers today, things like stair risers no higher than seven inches, raised dishwashers, wonderful utility spaces.
“No client asks for two-story entries,” he said.
Dan Swift of BSB suggested that spaces that can flex into different uses are attractive to buyers, as are spaces tailored to individual buyer needs in certain populations. He said homes with a separate “curry kitchen” where cooking smells can be isolated from the main living area are popular with some Indian buyers.
Building “snore rooms” and master closets that can be accessed from both outside as well as inside the master suites for older couples who no longer sleep together was another suggestion.
But, most of all, he suggested that plans should be different from what has been available in the past.
“If you can get it in resale," he said, speaking of the floor plan and features, "we go back to the drawing board."
Teresa Burney is a senior editor for Builder magazine.