By R.E. Blake Evans
For several years now, low mortgage rates have helped boost housing. But the historic low rates at the end of 2001 failed to change many builder marketing plans. "Move-down buyers come with cash. They don't need a 'heavy close,'" says Leisa Weintraub, vice president of marketing for Neal Communities in Bradenton, Fla. "[These buyers] watch interest rates as much as we do, but their buying decision is about lifestyle."
Some industry experts are amazed that more home builders did not jump on the low interest rate marketing blitz the way car dealers did. "Despite the fact that [mortgage] rates are tied to the bond market, it's unfortunate the industry did not wave the low-interest flag more," says Sandra Kulli, a builder's marketing strategist in Malibu, Calif. "We've seen the bottom [of the rates]. They will still be attractive in '02, but most of the industry missed the boat."
Some builders did catch the boat, though. McStain Neighborhoods in Boulder, Colo., launched its 'Renters Rejoice' campaign, sending out postcards to tenants who paid rents in the $800 to $900 range. More than 2,000 cards were sent to a list of qualified renters with an immediate 2 percent response rate.
Renters rejoice: McStain Neighborhoods sells its High Plains Village at Centerra by making rentals the enemy. With low interest rates, renters can buy two-bedroom homes for the same monthly rate as their rent. Photo: Courtesy McStain Neighborhoods
"The interest rate is not the best [marketing] approach for move-up buyers. But it is a must for first-time buyers who may be afraid of the financial commitment," says Jeff Kingsbury, vice president of sales at McStain. "And first-time buyers are the move-up buyers of the future," he adds. "You have to show them that it is easy, otherwise buyers will not make the first step."