Looking to Unload
With sales sluggish, builders try auctions to move houses.
As recently as February, auctions were seen as a last resort, something home builders were afraid would set off panic. “It makes the community look desperate no matter how you market it, and I've seen it go bad and significantly bring down the value and comps of a community,” Hope Dilbeck, director of sales and marketing for the Bakersfield, Calif., division of Standard Pacific Homes, told BUILDER in February.
Fast-forward through the burst credit bubble, subprime lending fallout, tightening credit standards, record-high inventory levels, and a precipitous drop in demand for houses, and home builders are no longer shunning auctions as a way to move product.
At the end of September, D.R. Horton, the country's largest-volume builder, and Leonard Development Co., a Sacramento, Calif.–based builder, hired Real Estate Disposition Corp., in Irvine, Calif., to unload some of their California properties. D.R. Horton, according to its Web site, was auctioning 53 units in San Diego; Leonard Development was offering 22 townhomes in West Sacramento.
But apparently the stigma of selling new homes at auction remains. How else to explain D.R. Horton's move to close its auction to anyone who didn't pay $5,000 to register, including the media? The company also refused to return phone calls seeking details on how successful the auction was.
While Leonard Development didn't close its auction to the media, it also declined to return numerous phone messages seeking comment on how the sale went. No published reports indicate whether Leonard was able to sell all 22 units.
Tuning In
Arbitron's People Meter revolutionizes radio ratings.
The radio equivalent of TV's Nielsen ratings, Arbitron ratings measure who listens to which radio stations at various times of the day. Paper diaries that Arbitron households fill out and mail in weekly have been criticized for years as inaccurate at best.
Now, Arbitron has introduced the Portable People Meter (PPM), an electronic device that records listeners' stations automatically. By the end of 2008, the units will be in 12 of the nation's top radio markets.
Already, the meters are shaking up long-held beliefs about radio listening habits. People don't automatically change stations during commercial breaks, Arbitron reports.
“They're finding through PPMs that radio is a fantastic medium to reach working people” says Scott Hamula, associate professor of integrated marketing communications at Ithaca College, in Ithaca, N.Y. “Working people have money, and working people buy homes.”
Not only will the information be more accurate, it will also be more frequent. With paper diaries, ratings were issued quarterly. In PPM markets, Arbitron distributes 13 reports a year.
With a more accurate method of measuring audience, builders should become more comfortable with advertising on radio than in the past, says Harvey Haddon, president of Chicago-based FireStar Communications.
“Paying for specific audiences is an acceptable expense,” Haddon says. “When you talk about drive-time markets, when [a station] says it gets 35,000 people in a certain age category in a particular quarter hour, you can be pretty sure the station is getting that.” - Pat Curry