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Q & A with
Dennis Walsh
As we move into 2006, are there any trends or changes in the new homes
business that present either significant opportunities or challenges?
-B.C.
from Mayfield, Hts., OH
Your timing on this question is perfect, as most of my
presentations this time of year are focused on this topic. For the last 17
years, I’ve conducted a national survey of market conditions, trends and
projections based on feedback from builders and new homes sales and
marketing professionals from coast-to-coast. Without a doubt, most of us are
recognizing that some significant changes in market conditions are already
underway – or are just beginning. And as I’ve always emphasized, as we
identify new challenges, we also identify new opportunities for those who
find the right solutions to overcome those challenges.
With that in mind, some of the key trends I’ve identified include:
Demographics – Several significant demographic changes have been
underway for years that will continue to impact housing demand,
opportunities and specific design considerations for many years to come.
The single largest demographic segment, Baby Boomers continue to join the
ranks of graying Americans. In fact, almost three million are turning age 50
every year. As the household profiles change, so too does Boomers definition
of the types of homes and communities that meet their needs. While retiring
Americans often stayed in the large homes in which they raised their
families, roughly 50% today say they look forward to moving when they
retire. They often are looking for smaller, easier to maintain homes that
provide security and convenience. Appealing communities are designed to
offer a sense of neighborhood, social opportunities, as well as a location
and amenities that support an active lifestyle. As one sales specialist in
seniors’ housing says, “This group used to spend their time playing
shuffleboard, now they’re bungee-jumping.”
The children of the Baby Boomers, known as the “Echo Boomers” or “Generation
Y”, are moving rapidly into their homeownership years. Many opportunities
exist to provide housing to meet the preferences of this group. From a
marketing perspective, it’s important to keep in mind that these prospects
are tech savvy, have been influenced by fast-moving “MTV-style” advertising
and look to the internet for information and communication.
Another demographic segment of growing importance as it relates to housing
is the large group of recent immigrants I like to refer to as “The New
Americans.” Every year more and more have established themselves in their
careers and businesses and find themselves eager to join the ranks of
homeowners. Different cultures and household types bring different forms of
housing needs. An awareness of these cultural needs and differences is
critical in growing your business in this arena.
Condominiums – There continues to be more and more evidence that the
popularity of condominium ownership will grow substantially in the next
decade and beyond. Driven by rising land costs, limited availability, and
other factors, new home communities continue to move farther and farther
from urban cores and employment centers. While condos for years were
considered a low cost option to single-family detached housing, today we
find more buyers seeking condos as high-end, luxury lifestyle solution. The
most successful projects offer luxurious floor plans and amenities. These
buildings also offer a host of convenience services from concierge, limos,
dry-cleaning and others. Popular locations include those in urban centers,
close to top shopping, shows, sports events, etc. Tremendous premiums are
often paid for those units offering outstanding views and locations.
Construction Materials & Methods – The desire for low-maintenance,
energy efficiency and kind-to-the-environment “green building” continues to
drive the introduction of new materials and methods. The terrible impact of
last year’s hurricanes, tornadoes and other disasters has begun to drive
more of an awareness and desire for building materials and methods that
offer storm resistance. More than ever before, homebuyers want to understand
the details of how their home is built and want to be assured that their
investment is well protected from potential damage by Mother Nature. New
products include storm-resistant windows, water-draining house wraps, new
flashing materials, and better sheathings. Builders in hurricane corridors
are starting to experiment with both factory-built and site-fabricated
methods using poured concrete and reinforced cement block construction
methods designed to offer greater storm resistance.
Marketing – Real estate sales & marketing professionals continue to
adapt their marketing plans to make the best use of the internet and related
technology. More are beginning to describe their primary advertising
objective to be driving traffic to their web site – and then from there, to
their communities. At the same time, the design of builders and sales
professionals’ web sites continue to evolve in their sophistication. These
sites are designed to provide detailed information while also building both
customer relationships and quality brand recognition.
More real estate professionals report their focus on differentiating
themselves as it relates to market expertise and comprehensive customer
service. With more experienced homeowners, buyers and sellers in today’s
market, professionalism, organization and outstanding communication systems
are essential.
As more markets begin to cool, builders and sales teams report that they are
carefully rethinking overall marketing and business strategies. When I use
the term ‘marketing’ in this context, I’m talking about marketing in the
broadest sense, as I describe in the CNHS certification training. This
includes product design, positioning and pricing strategies, broker
relations, advertising programs and more. In the current and future climate,
many new home sales and marketing professionals will find themselves in
demand to help advise builders and continue to manage sales success.
There are many more trends and changes in the areas of architectural design,
land planning, interior design, and buyer preferences. Although I can’t take
the time here to detail these, I’d like to suggest that it’s as important as
ever before to stay on top of your market research and customer awareness to
understand the keys that will drive success in your business. I again
encourage you to embrace the new challenges you face in 2006 and enjoy the
tremendous opportunities they present.
Have a question for Dennis? Write to
question@sellnewhomes.com...
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