Denise Dersin

Editor in Chief
Anje Jager/ Denise Dersin Editor in Chief

I had the pleasure of visiting San Antonio for several days in June and was able to spend some time with a number of builders there, seeing some of their projects, and talking about some of the challenges in their market. Oddly enough, they didn’t consider the heat to be one of those challenges even though it registered in the triple digits for most of each day that I was there. I guess you get used to it after a while.

None of them, it seems, has gotten used to the problems they face in their businesses, though. Such as fewer developed lots in good locations, lack of demand, and not much in the way of financing for the few buyers there are. In that respect, the area is pretty much in the same boat as most other parts of the country.

Relatively speaking, however, the San Antonio market is doing fairly well. Its MSA (which includes New Braunfels), chalked up 8,117 closings last year, coming in at No. 6 on our 2010 Local Leaders list. Of course, that number doesn’t begin to approach the 22,000-plus permits that were issued there in 2005, but not even Houston, at No. 1 on the 2010 list, comes close to that number in these straitened times.

But competition for each one of those closings in San Antonio is really stiff. Six of the top 10 builders there are big public companies, and together the big guys garnered 44 percent of the market share. So how does a smaller, regional or local builder compete with the better known, deep-pocketed, marketing machines that are the big builders?

There are lots of ways, honestly, and the builders I met with in San Antonio were making the most of many of them. Such as hiring really great people, supporting them in their endeavors, and letting them know their work is appreciated. Building great houses that combine beautiful design and building science to best effect and showing them off in picture perfect models. Building a relationship with customers that is designed to make the home buying process a pleasure, not an anxiety-producing ordeal. Carefully researching the market to find out who those buyers are, what they want, and where they want it.

The last item on that list is getting to be the most difficult to deliver on. You do your market research, you determine your target customer, and you’re pretty sure you have a good handle on what they want to buy. The perfect location, however, is not so easy to come by.

The days of choosing a pristine piece of land that you can turn into the project of your dreams and customers will flock to in order to get a chance to buy there are over, at least for the time being. These days, you have to dig deep to find and create your own opportunities. You have to look beyond inherent or man-made issues in a property and work long and hard to find ways to overcome them.

It may be a parcel that another builder thought was perfect for a high-end project right before the market for that price point went south. It might be an entire master planned community that was banking on buyers who just a short time ago were prepared to drive to qualify. It could be land that contains a historic site or where someone has discovered fossils that need to be carefully excavated before any building can begin. Or it just may be, as some say, a piece of property that has so much hair on it no one else wants to touch it.

In our Special Report this month about the changing nature of development opportunities, beginning on page 48, we offer many examples of problematic sites that are being transformed into settings for dream homes—not for everyone, mind you, but for the very people who need and want them.

Creating your own opportunities is not an easy task, to be sure, as the builders profiled in the story would be the first to admit. But if you’re not already doing it, I’d be willing to bet you will be soon.

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Learn more about markets featured in this article: San Antonio, TX.