Question

Topic: Other

Starting A New Subdivision In A Down Market

Posted by Anonymous on 4/27/2008 at 3:52 PM ET 250 Points
I'm working with a developer in Ma where we're just beginning the 1st Phase of a 200 lot subdivision. We've just finished our first two homes one of which will be merchandised next week. Our product ranges from entry level 1500 sf to 2800sf, our demographic is first time buyers, second & third buyers and empty nesters. Our problem is trying to create a sense of urgency, most have homes to sell but are no rush to put them on the market because it's so slow. I'd like to offer Also, we don't want to compromise the price, but the builder is willing to offer a buy down program or include some concessions. I'm planning several grand openings in May and some first time home buyer seminars at our new model home, as well. Any other ideas, I love this site and the creativity it offers. I'd appreciate any suggestions.
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  • Posted by Inbox_Interactive on 4/27/2008 at 4:07 PM Accepted
    Your local market conditions and competition are going to be your biggest influence on what to do.

    I'm not sure how you plan to reach a target market that doesn't seem to leave anyone out...first-time, second-time, third-time buyers and empty nesters...that's pretty broad. Who is this community for?

    For first-time buyers, most are not interested in the price as much as they are the monthly payment and how much they have to put down. When ou hold your first-time buyer seminars, you're going to want an experienced mortgage banker or broker there who knows about ALL of the ways that homes get financed in TODAY's market. There are still 100% financing programs out there, and that could be a big part of your message to first-time buyers.

    If the market is slow, then for those who need to sell their house to buy yours, you might offer to make pay their commission (up to $X) on the sale of their old house. Or some other financial incentive...can't say what would work because I don't know your market.

    With 200 lots to build, how long are you planning to be there? What's your target absorption rate per month?

    Seems like you're going to be there for a couple of years, at least, so you might want to suggest that prices are at their bottom and are expected to go up when the market improves. I understand that you don't want to slash prices, per se, but generally speaking buyers are being told to look for lots of incentives, like buying down their mortgage or closing help or upgrades or free BMW lease for a year, etc.

    - Paul
  • Posted on 4/28/2008 at 7:20 AM Author
    Thank you for your response Paul. We expect the absorption rate to be 2-3/month, so it's at least a 5 year project. I like your ideas, I do have an excellent mortgage broker on board for our seminars, we're prepared to do this several times a month in our model home. I'm thinking of putting together a package called "Buyer's Solutions" or something to that effect, that the developer's are prepared to participate in, depending on the problem we can offer to list their home at 4%, offer a buy/down program, pay for all of a portion of closing costs or throw in some concessions. What do you think? Also, I'd like opinions on direct mail, there are many apartment complexes in the immediate area. I love this forum, it's helped me tremendously, I come here for answers everyday.
  • Posted on 4/29/2008 at 7:00 PM Accepted
    I'll tackle your second- and third-time buyers plus empty nesters.

    What do your homes offer that would be of particular interest to those groups?

    Here are some hot buttons:
    --Smaller home with exceptional amenities
    --Within walking distance to shopping, dining and entertainment
    --Better suited for entertaining
    --One-floor living without stairs
    --Great proximity to golf, parks, greenway, trails
    --If the second or third-time buyers have children, do you have nice lots for playing, a playground, a park nearby, a pool?

    Even if your homes could be of equal attractiveness to all your target audiences, it's best to prioritize in order to avoid diluting your message or confusing your image. Pick the 2 groups that are most likely to make a quick move, and focus on them first.

    You can also offer "bonus packages" of included items that are targeted to your target audiences. For example, you could do a "backyard package" that includes a choice of grill, outdoor furniture and a gift certificate for plants from a local nursery. Or an "entertainment package" that includes a flat screen TV, a cable service upgrade and gift certificate to a local video rental store.

    The more you know about the lifestyle needs of your target audiences, the better you'll be able to tailor your promotions to their interests. Given today's real estate market, depending on your local conditions, it may be difficult to get people into the market in a hurry. Your best bet may be to capture the people who MUST make a move soon--relocations, family expansion, etc. You don't have to persuade those people to buy, you just have to get them to buy from you.
  • Posted on 4/30/2008 at 6:49 AM Author
    I love these ideas Gail. We do have a one level plan and we do have a park and little town beach at the end of the road. You make a good point about targeting one particular group, I've been trying to include everyone in my marketing attempts, I guess it's too broad a demographic. We're almost ready to celebrate our "Grand Opening", I'm going to incorporate some of these ideas into my marketing plan. Thanks for your help.
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