It does not matter whether I go north, south, east or west; to a large metropolitan area or a small remote town. It does not matter if I am there to explore new market opportunities, strategize a new development, reposition an existing community, work with a homebuilder on new products or otherwise assist a client or if I am in town to teach a class or lead a seminar. Repeatedly the response I receive to a suggestion for any adjustment or improvement is “It’s different here, you do not know this market.”
Perhaps in the future I will travel in hyperspace to a remote planet near the galactic center where the laws of physics or the laws of nature do not apply and then, and only then, it may well be true that it is different there. But until that time, the reality is that, regardless of the location, most housing markets in this country and across the globe are far more similar than they are different.
Of course there are local considerations in every marketplace that have impact on the consumer purchasing patterns and help to determine sales by any homebuilder. There is typically a “good” side of town and a “bad” side of town, a “blue collar” side of town and a “white color” side of town, even a “cheap” side of town and an “expensive” side of town, often all determined by industry and employment centers, roadways, natural barriers and historical development and settlement patterns. There are locational preferences for specific ethnic and other sub-market groups that must be respected. There are local architectural, design and product preferences and prejudices that are difficult to change. These specific factors of each local market are certainly valid but they can usually be identified and codified fairly quickly by observation and market research and the underlying concepts are relatively constant in every market although the details may vary.
More important than these local specifics, however, are the similarities in every market that apply to homebuilding:
- Home buyers tend to desire a convenient location, proximate to employment, shopping and services;
- They wish to be near a wealth of desirable amenities, if not within the specific development then nearby, available for use and affordable within their budget;
- Buyers wish to have good schools, even if they do not have school age children, as this factor stabilizes demand and increases values in the community;
- Purchasers wish to live in well maintained communities where the residents visibly display that they are proud to live there and care for their homes and grounds;
- And they prefer to live in neighborhoods with low crime rates.
There was an interesting article posted recently on Bankrate.com that examined housing values in neighborhoods within major metro areas. Those local areas where property values were maintained or showed increases, even when the overall market had shown declines in values, had all of the elements listed above.
A few additional factors that are “absolutes” for homebuilders in every market include:
- Purchasers desire an attractive, well designed and functional home that satisfies their needs and reasonable desires;
- Homebuyers wish a home built by a reputable builder known for delivering a quality product;
- They wish a home that is affordable (within their budget), providing a fair price and reasonable value;
- They wish to receive a professional sales experience where they are treated with respect;
- And they wish to experience minimal stress and aggravation during the home purchase and construction process.
I always tell the truth, sometimes with unfortunate consequences. Recently I spent a week in a southern market and, when my client asked my opinion on the community in which we were standing, I suggested to this homebuilder that there were several apparent opportunities for improvement which I then proceeded to discuss in detail. I was not surprised when I received the standard response of “you do not know this market, it’s different here”. As this was a new client and I did not wish to have the relationship terminated immediately, instead of responding with the first thought that came into my head – “really, does the market line up to buy ugly overpriced houses here”, my response was carefully measured.
I admitted that I certainly did not have the experience in this market that the homebuilder had gained in thirty years of business and, although I had worked there in the past, I would be researching the marketplace as if I had never been there and I hoped to know the local preferences and specifics by the time I had finished my study. And then I listed the similarities that I had found in every market in which I had done business and asked if these were not also true for this market. When the client confirmed that these factors were valid there, I then explained how my suggested improvements would maximize the perception as well as reality of these common purchasing requirements. Of course, that was just my opinion, but that was what the client was paying for.
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