Nobody
in the business of home building or advising home builders seemed to be
willing to predict when the market will turn around at Builder and Big Builder's
Housing Leadership Conference in Chicago this week. They've been wrong
too many times before. But there was plenty of advice about how to sell
houses in the meantime.
Mind
you, nobody said it's an easy thing to get buyers to commit these days,
yet there were those with success stories to tell and secrets to share.
Brooke
Warrick, president of America LIVES, offered attendees insight into the
brains of potential buyers today, and the news wasn't good. People
don't think things are getting better; they're worried and are buying
burglar alarms and weapons to feel protected and chocolate to placate
their worried souls, said Warrick at the Capitalizing on Market Research
to Develop Innovative New Products session. And those negative feelings
about housing are likely to be lasting. "It's not cyclical. It's
probably seismic," he said.
Warrick, like many session speakers suggested builders
target women, who make most buying decisions, and 55-plus buyers, who
have the cash. He suggests that builders use "trust marks" such as the
Energy Star label and the green circular arrow symbol of recycling to
attract buyers to product.
At
the same session Barb Nagle Statler, president of Marketscape Research
and Consulting, said builders need to get discretionary buyers back into
the market again.
"There
is not a product I can think of that survives without the discretionary
buyer," said Statler. To bring those buyers into the market she
suggested builders need to inspire confidence that buying is a good idea
when friends and relatives tell them it's not; contrast their product
to existing homes; and establish a connection between the buyer and the
product.
While
buyers prefer new homes, they are no longer enchanted with new
neighborhoods. They perceive them as more troubled by foreclosures and
unfinished amenities than existing neighborhoods where people bought their homes years ago and foreclosures are scarcer.
"The bloom is off the rose when it comes to new neighborhoods," she said.
Contrasting
the new product to the old and making it better is a way to inspire
buyers. "Customers don't make a change until they are comfortable that
the alternative is different and better than other available
alternatives," Statler said. "Consumers say this is where builders are
falling short."
New product and neighborhoods with a sense of place are what buyers want, she said.
Speakers
offered tips on how to find and build those kinds of neighborhoods
buyers want in the Reengineering New-Home Communities session.
Peter
Tremulis, managing principal of National Asset Management, suggested
builders look for communities in areas where there are job formations,
retool their products to appeal to buyers, and seek infill
locations closer in to cities rather than greenfields a long commute
from jobs.
Jeff
Kaizer, vice president of sales and marketing for M/I Homes, shared a
story about retooling an Orlando community platted for town homes into a
single-family neighborhood that sold fast at high margins. M/I
developed a 30-foot-wide product with backyards that buyers wanted and
paid more for.
In the end, the community sold five months ahead of schedule, and with "margins that were the talk of the town."
Kaizer suggested builders look to fill product gaps in markets and to "zag" when everybody else is "zigging."
Well-known
architects Carson Looney, principal of Looney Ricks Kiss Architects,
and Dan Swift, senior partner for BSB Design, offered tips on designing
homes that buyers want today in the Rethinking New-Home Design seminar.
Looney
suggested homes should be designed inside-out, concentrating on floor
plan, rather than outside-in, focusing on the elevation of the homes.
Essentials
for buyers today are family entry areas from the garage into the house
where backpacks and mail can be dropped. These areas function as
"livers" filtering out the junk of the world before moving into the rest
of the house.
Looney
said buyers would rather have more closet space than large master baths
with huge garden tubs. Closets are like cup holders in cars, essential
to the happiness of inhabitants, and that having a house without a home
office area is like "having a car without brakes."
It's
the little practical things, rather than the visual "sizzle," that
attracts buyers today, things like stair risers no higher than seven
inches, raised dishwashers, wonderful utility spaces.
"No client asks for two-story entries," he said.
Dan
Swift of BSB suggested that spaces that can flex into different
uses are attractive to buyers, as are spaces tailored to individual
buyer needs in certain populations. He said homes with a separate "curry
kitchen" where cooking smells can be isolated from the main living area
are popular with some Indian buyers.
Building
"snore rooms" and master closets that can be accessed from both outside
as well as inside the master suites for older couples who no longer
sleep together was another suggestion.
But, most of all, he suggested that plans should be different from what has been available in the past.
"If you can get it in resale," he said, speaking of the floor plan and features, "we go back to the drawing board."
Teresa Burney is a senior editor for Builder
magazine