Blowing Their Own Horns
During that seminar, Woods encouraged his audience to “know your market,” a common theme heard from builders and suppliers during the convention. It would appear this message is sinking in, based on a survey of 304 builders that the NAHB Research Center conducted in January. Two-fifths of those polled see a greater need to place more emphasis on selling, which would include making better use of brokers, conducting more sales events, upgrading their companies’ Web sites, and developing a referral program.
The downturn is forcing builders that otherwise might resist spending money on marketing to get the word out more aggressively about what distinguishes their homes from the rest of the pack. For the first time this year, Estes Builders in Sequim, Wash., will spend 1 percent of its revenue on advertising, says owner Kevin Estes. Both Dublin, Ohio–based Epcon Communities, the industry’s second-largest condo builder, and Tapestry Custom Homes in McKinney, Texas, are attempting to develop a niche using universal design, which Tapestry president Bill Slease is convinced will be the next wave that drives the green building movement.
Credit: Oscar Einzig
Judging by the overflow crowds drawn by any seminar with “green” in its title at IBS, it appears that more builders than ever are looking to market themselves and their products as sustainable and eco-friendlier. At one session called “Green Building 101,” Don Ferrier of the Fort Worth, Texas, design/build firm Ferrier Builders, noted that his company—which at the time of the convention already had secured a dozen contracts from buyers, compared to three in all of 2006 and four in 2007—is striking a chord with baby boomers who see a green home as “the wisest investment they will ever make. They are worried about escalating gas prices, and they want to make sure the house they buy isn’t going to cut into their retirement savings unexpectedly.” Even Magleby, whose company builds homes as large as 15,000 square feet, says all of his houses are Energy Star rated.
But as long as the housing market is limping, “green” could take a back seat to “affordable,” as more builders develop homes they can market to customers looking for “value.” “We’re trying to stay ahead of the curve with leading-edge design that’s also repeatable,” says Thomas Sattler, president of Denver-based custom builder Sattler Homes, which created a division to build and sell semi-custom products. Wilmington, N.C.–based Kent Homes did the same thing when it recently launched its Kent Select portfolio of eight semi-custom home styles. Payne & Payne Builders in the Cleveland market is looking into “sub-branding” for its semi-custom product, says president Dean Tompkins.
On the other end of the price spectrum, Camp Construction recently offered its first house priced under $200,000 and is among the builders developing bare-bones homes they can sell cheaply. Hubble Homes in Des Moines, Iowa, doubled its sales last year, to $32 million, after redesigning its product to reflect what customers could afford. “If the market is going to allow you to sell a home for a certain amount of money, then that’s what the house is worth, and it’s up to the builder to redesign the floor plans … for market rate and still make money,” said Hubble’s CEO Rick Tollakson during IBS. “This is the perfect time to increase market share,” adds Estes.
Senior editors Jenny Sullivan and Ethan Butterfield contributed reporting for this article.