This is a story about recovery. It's about all the things you can do—and are–doing to fight your way out of a slump such as this one. Like many a housing cycle before, a recovery this time around will begin with the first-time buyer.
There's little doubt that a significant number of would-be first-time buyers are out there. Life in one way or another adds up to wanting a home as a statement of independence, a measure of success, or both. But this last run up in housing priced too many out of the market.
So, the question today is whether or not builders can lure them in at a time when fewer financing options, fear of paying more for a home than it's worth, and a general unease about the state of the economy have many thinking it's not such a good time to buy.
The answer is, yes.
BIG BUILDER teamed up with its sister division, Hanley Wood Market Intelligence (HWMI), to scour the market for entry-level projects that were outperforming peers—even in this market. Working with HWMI researchers on the ground, we looked at location, product, pricing, and design to determine what combination of elements were getting first-time buyers off the fence in these most uncertain of times.
We examined 25 markets; here, we'll show you good-to-top performing communities in five. But don't worry, the director's cut version is online.
Some overarching trends emerged from the exercise. The most successful communities tagged buyers based on price; quite simply, less expensive homes moved faster. That's likely not a surprise, but what perhaps is unexpected is that the builders behind them were not necessarily reducing square footage or stripping down options in the homes themselves.
While our on-the-ground HWMI researchers ranked affordability highest on a list of secrets to a community's success, attractive product design came in second while value took bronze. Interestingly, some performing communities clocked only a “good” location, as opposed to an excellent location, but amenities had to be top notch.
While finding the exact combination for each property requires a little bit of magic and a smallish dose of science, the bottom line is simple: First-time buyers today want it all. They want a community packed to the gills with amenities and an attractive product that they'll be happy to come home to—and they want it at a price they can afford.
That's a steep order to fill, but future success may depend on it. So, sit back, and take a few notes from your industry colleagues. All data is from HWMI.