Post-recession, real estate developers were forced to recalibrate how they market their properties to buyers and essentially start over because the market for new construction as they knew it had changed. Gone was free money, subprime loans, “McMansions” and the idea that bigger is better. In its place was a return to simpler times, a desire to feel connected to the community, neighbors and the outdoors.
Connectivity to nature trails, dog parks and wide open spaces, and walkability to restaurants, retail and entertainment venues are what today’s homebuyers seek in a community. Rising to the challenge, developers are building more than new homes with cutting edge layouts and finishes, they are creating lifestyles.
In turn, amenities are being placed at the forefront of marketing campaigns and it’s paying off. Excited about the changes in marketing new construction post-recession, developers, homebuilders and marketing executives explain why strategies that worked in the past don’t apply today and what they are doing now to attract buyers.
Agents as advocates
Carefully tracking sales, Jim Bellinger, Atlanta division president of Smith Douglas, says nearly half of the company’s sales come directly from co-op agents and about 70 percent of sales include a co-op agent.
“Even though a buyer may find us through another avenue, they still want representation,” Bellinger says.
He says agents play a huge role in marketing to local brokerages, whether it’s dropping off fliers, sponsoring a meeting or scheduling a presentation. When traffic slows down in June and July, Bellinger emphasizes to agents how important it is to do a little extra foot work, to make sure that when a prospect walks in the door they are doing everything they can to get them to buy a Smith Douglas home.
“The more we engage with the local brokerages about our products and communities, the better chance we have at selling,” he says.
Building brand advocacy with agents is of prime importance to Ashton Woods as well. With a combination of its community sales managers and the Inspiration Collective program, the developer works with agency partners to inform them about their approach to design, their process and more.
“Our community sales managers are dedicated to keeping close relationships with local agents and always ensure they receive the latest information on our homes and communities,” Michael Malloy, vice president of marketing and sales for Ashton Woods, says. “The Collective will equip our agency partners with insights into our brand that they simply cannot get anywhere else.”
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Although Edward Andrews Homes has its own brokerage house of agents, it also works with co-op agents through its Elite programs, which are free to join. Elite members get the inside scoop on pre-openings and generous commissions upfront at contract signings.
“A lot of agents love working with us,” says Caroline Simmel, chief marketing officer of Edward Andrews Homes in Atlanta. “Once customers sign the contract, they go into the design process and the co-op agent doesn’t have to babysit or get involved. Co-op agents love that they are not micromanaging a build.”
A recent national survey of future homebuyers conducted by Ashton Woods found personalized design options and customer satisfaction to be the most important considerations for buyers when selecting a homebuilder.
“Three-fourths of the participants said they are more likely to select a builder that offers design personalization options over one that does not,” says Malloy. Delivering what customers asked for, Ashton Woods bases its overall approach and focus on design, personalizing spaces for buyers.
“We gather design inspiration from around the world for the discerning buyer who wants not just any home design but one that is a perfect reflection of themselves,” he says. “They also look for a collaborative process — one that empowers them to be a true partner in the experience — with a dedicated team of experts guiding them through the design journey.”
In the past, agents checked out design selections for the home, Simmel says. “It didn’t work. Agents are great at selling homes but they’re not designers.”
Edward Andrews Homes has gone from closing 12 new homes a year during the recession to selling upwards of 400 properties annually thanks to a successful rebranding. The developer transitioned its business model from “builder-centric” to “customer-centric” by centering its brand on design.
“We give people the design options to have curated homes that are an expression of themselves,” says Simmel.
What’s more, she adds, is that the old cookie-cutter way of just carving out lots and plopping down houses is over. “Now there is a shift in value and the way people want to live. They are not going for huge mansions, they are going for comfortable luxury, a well-built purposeful home that adapts to their lifestyle.”
A video on the Edward Andrews Homes web site shows potential buyers what their life could be like living in the homebuilder’s new townhome community, The Swift. The short clip highlights ordinary experiences — jogging along the nature trail, shopping at the farmers market, visiting the local coffee shop, roasting marshmallows around a campfire and dining out with friends — that seem extraordinary when they take place within walking distance from your home.
“People want green space, they want to connect with their neighbors,” Simmel says. “We focus on converging the neighborhood with the surrounding area.”
Mixing in modern marketing techniques
Adapting to the marketplace, Edward Andrews Homes’ approach to design adds in an element of technology to the mix. Buyers take an algorithm-based visual design quiz that she likens to the Myers-Briggs personality test to determine their color palette and style. They also respond to questions about who lives with them – pets, children, parents – to help designers assist them in selecting floorplans that suit their lifestyles.
“Lifestyle, location and pricing people into the market is what we strive to do,” Simmel says. The homebuilder crafts amenities based on trends and the way people live. Parks, restaurants and green space might rank top priority for young professionals or empty nesters with an “every night is Friday night lifestyle,” while schools might be most important to move-up buyers with children, Simmel says.
She explained the balance in the “art and science” of pricing people into the market. The science component has to do with demographics, price points, products, preferences and the area they want to live in. The art component is based on lifestyle, experience, a sense of connecting to the community, and all those local amenities around it.
“It’s a balancing act,” she says. “We call it ‘location lifestyle,’ we design all the things that really make for a great life.”
Bellinger admits that people enjoy walking trails, swimming pools, and multi-use common areas for playing soccer, football and Frisbee, but his company strongly believes that the ultimate amenity is being able to provide an affordable price point. The developer entered the business in 2008, the depths of the recession, and with 37 active communities, it targets areas where it can stay at FHA loan limits or below.
“We have a holistic marketing plan, both digital and traditional marketing since there’s so much online activity today,” Bellinger says. “We practice a digital first marketing strategy. We know that home shoppers spend a lot of time gathering information online before they take that step into the sales center.”
Going where the buyers go, Smith Douglas relies on SEO and websites such as Trulia, Zillow, NewHomeSource.com and Realtor.com that have resulted in sales. He also resorts to the basics, yard signs and direct mail pieces. Regardless of the location, city or suburbs, the developer’s marketing approach stays the same.
Things are looking up
Simmel is bullish on the Atlanta market. “Atlanta has a tremendous good news story: job growth, wage growth, an international city with the largest airport in the world,” she says. “We happen to be an affordable market as well.”
Nationally, new home market share is about 10 percent, Simmel says. In Atlanta, it’s at 16 percent, still low in normal times. “Before the recession, during the housing peak, new construction comprised from 35 to 40 percent market share over resale,” she says. “We had our work cut out for us. We went from 60,000 permits a year down to 8,000 permits a year.”
She says sales didn’t start to upswing until 2010 and 2011. “Very slowly, we’ve had a long, tepid recovery. A typical recovery is volume first and then price appreciation; Atlanta’s recovery was strictly price appreciation followed by volume. 2013 was a white hot year of price appreciation.”
Edward Andrews has always strived to be an innovative, cutting edge builder, Simmel says. Coupling new construction with amenities that cater to active lifestyles has proven to be a winning combination for marketing new construction to buyers that remain hesitant following the Great Recession. “We don’t want to follow, we want to lead,” Simmel says. “I think we’ve done a good job of redefining the way people build new construction. We’re really just getting started.”