Archive for January, 2010

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Transparency seems to be the name of the game these days and it’s easy to see why. If you can leverage transparency in your favor, it can become a powerful selling tool.

Specifically, transparency in real estate can go in two very different directions. If you have nothing to hide and you’re a professional, transparency can help you. If your methods and ethics are questionable, transparency is going to hurt you.

The funny thing about transparency in any kind of business is that it’s becoming the norm. Very soon your lack of transparency will hurt your reputation regardless of your business ethics. I will explain why with an example.

Transparency models are rolling out daily and Homethinking.com has introduced a transparent directory of real estate agents. This directory includes Realtor information along with past transactions. A Realtor has a profile that includes personal info as well as past transactions. Details include the areas they have sold in, number of homes sold, and a comparison between actual sale price and the one advertised.

Enter User Feedback

User feedback is the game changer for this site. Users with past experience with a Realtor will be interviewed. They will be asked how well they interacted with the Realtor, how they set sale prices, and how attentive the Realtor was to questions. If you’re a realtor and you’re rude to your clients, people will know about it.

How to Leverage User Feedback

If you are a thriving Realtor and you excel, it would be wise of you to claim a profile on Homethinking.com. This is a great way for potential clients to see your value as a Realtor. Transparency can be an asset for those who are good at what they do.

What If You Have A Bad Reputation?

The consumer is going to review you regardless of your participation. I would also think that avoiding such sites would raise questions. Sites like these are becoming more prevalent every day. It’s becoming the norm and people will start to depend on the reviews of others in most decision processes. They may associate your lack of participation with your need to hide certain details of your work.

That’s the thing about social media and sites like Homehtinking.com. People are starting to expect a certain degree of openness. If you don’t give it to them, they will probably start asking questions. I would eliminate any doubts they may have. Be open about yourself because people want to know and understand who they are doing business with. It can only help you.

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NAHB.com has a very interesting article on their site talking about the cost-effective green trend. I have been reading and talking about this trend for a while now and its great to see NAHB take on this initiative. A lot of what they outline in the article is very similar to many of past blog posts here on Idea Views.

According to the NAHB article, green home building professionals at the NAHB International Builders stressed the importance of consumer understanding of green upgrades and their values. You can’t sell a consumer something that they don’t understand. Part of this explanation needs to include an understanding of cost-effective sustainable features can be in the long run.

Steve Bertasso, a consultant for sustainable building consultants, believes that the market has reached a tipping point in regards to sustainable development. Here are a few of his quotes from the NAHB.com article.

“It’s moving out of the custom built home market into the realm of high-production homes.”

“This year is going to be a big change in the production environment”

“Consumers are asking questions they didn’t ask two and half years ago and contractors are making better decisions”

The last quote should resonate with you. I know it does with me. I touched on the dangers of ignoring a sustainable initiative. You can read in an older post of mine here. Consumers will no doubt be asking questions about cost efficient home features. Consumers will come to expect these features when looking for a new home. Pretty soon they won’t even be considered features, but standard home features.

It’s predicted that most of the home-building industry isn’t far behind the idea of high-production sustainable building. Many think that this might be the year when it really takes off. Regardless of when everyone else makes the move to more sustainable building, I hope that you’re already building sustainable homes or at least considering it. I stand by my previous predictions. If you ignore sustainability and the green movement in your next project, you’ll be the odd man out!

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What effect has the recession had on the average consumer? It has humbled them and made their “hot buttons” a little less hot! Big, flashy and expensive are no longer the trend. The consumer seems to be focused on necessity but also what is individually important to them.

Consumer demands and desires are shifting because of our current economic turmoil but also because of shifts in consumer preferences. We are selling real estate in a time where listening and research are more important than ever. This includes reading current reports on your niche market. For the 55+ markets, there is an interesting read over at Market Watch. You can read it here.

Who would have thought the day would come when golf courses where no longer a strong selling point for retirement living? We can thank this nasty recession for part of that downturn, but it also speaks to the consumer’s time and how they want to spend that time and with whom!

There are few topics from the article that are interesting.

Simplification of Desired Amenities

This is trend that I have previously discussed here on Idea Views. There is an obvious trend heading towards more natural and simple amenities in retirement and resort markets. These include walking paths, biking trails, and pavilions.

This scale back correlates with the economic times. In the Market Watch article, it is stated that current studies are finding that the cost of living in 55+ homes is more important than a warmer climate. For years a warmer climate and a golf course where the selling points, but things are changing.

The Necessities

The article also has an interesting list of what 55+ home buyers are looking for in a new home. Many of the features listed are related to health needs instead of extra curricular activities. Bathroom aids, wider doorways, accessible public transportation, and non-slip floors where among the list. These amenities are important to the 55+ markets. They care more about the necessities.

A Shift From Extraordinary to Practicality

By reading the Market Watch article you can see this shift occurring in the 50+ home markets. Most buyers in this market are living on a fixed income. They are not as focused on the bells and whistles. I think you can include the high-tech electronics with that as well. They are looking for a certain degree of ease in their lifestyles. Low maintenance and accessibility seems to be the name of the game for 55+ homes. Will the trend shift back towards the resort style living? Possibly. It depends on the economy. This is why it’s important to stay on top of marketing trends and demographics. You have to understand who you’re selling to in order to sell at all.

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It is refreshing to read a positive headline after 36 months of doom. I was extremely pleased to read “U.S. Consumer Confidence Reaches Highest Level Since September 2008” article.

The report includes details on this month’s major spike of U.S. consumer confidence which is absolutely necessary if we ever want to see an end to this recession. We have been told by all the pundits in the news that when consumers feel confident again that they will have their jobs and that their investments will come back, then they will buy primary homes, second homes and it’s especially true for luxury homes. We in the real estate industry have all been looking for the slightest sign of this optimism.

The article points to a reduction in jobless rates as on of the major contributors to the spike. That coupled with a multitude of positive economic news can be given most of the credit for the spike in confidence.

From a real estate point of view, I think we should be encouraged, but at the same time cautiously optimistic. An important statistic from the report measures the confidence level of consumers in regard to investing in real estate in the coming months. According to the report, 44% of polled consumers said that they think the next month will be a good time to buy real estate. This was a 3% increase from the previous month of December. In these economic times, any increase feels optimistic. If the recession really “ended” in the summer and consumers are supposed to “feel” like the recession is over 6 months later, then we are right on track.

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50+ Housing Online Magazine has come out with a few emerging trends for 2010. You can read it here.

Many predictions you have heard in other arenas, but I think it’s worth reading as a refresher. I am already spotting some of their predictions for the year in upcoming projects.

Their predictions include smaller homes and sustainable architecture. No surprises there, but there are a few predictions that I have yet to talk about.

Three Generational Families

In my opinion, this is a trend that is going to linger for a while. You can blame some of the push for multi-generational homes on the recession and increasing unemployment rate. Generation Y lost a lot of jobs this past year and they unfortunately had to move back home with mom and dad. This coupled with seniors moving in with their children for care is creating this trend for three-generational homes. There is also a cultural push that some cultures love having generations living together. Grandparents teach and help take care of the grandchildren. Remember those days?

Accessory Dwelling Units

Another interesting trend deals with adding second dwelling structure to residential properties. For the longest time ADUs were frowned upon by cities, but now many are starting to understand their benefits. It’s a good way for homeowners to generate income and they also provide an inexpensive housing option that will help increase the number of affordable homes. This is a huge benefit right now given the housing market and credit stranglehold.

Green Isn’t Going Anywhere

I know this isn’t new but it is controversial as many residential builders are saying the consumer doesn’t care about sustainable options. I can’t stress enough how important it is that your new project be constructed with sustainability in mind. For marketing reasons alone you should be planning on incorporating green features into your projects. This is going to become the standard and it’s not an option to skimp on these features. I can guarantee you that a buyer looking for a newly built home will be expecting sustainable and energy saving features. If you do decide to skip the sustainable features, you are taking yourself out of the game because your competitor will feature them.

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There is a great article on WSJ.com about businesses holding on to the traditional method of snail mail marketing.

The article demonstrates how companies are reverting back to the use of traditional direct mail pieces for effective marketing. The key to their success lies in the content of their mailers.

There were a couple of things in this article that stood out to me. For starters, each one had a unique message that reflected there firm’s own personal style. I think this is very important when creating any personal marketing piece. You have to be unique and at the same time stay true to who you are. Humor was one firm’s personality, so they made sure their mailers reflected that. People enjoy personality. Consumers would much rather buy from someone that they feel like they know. No one wants to buy from a stranger.

One business rejected the “mass mailer lists” and constructed their own personal lists. This works well in real estate. I like this method because it’s efficient and cost effective. You don’t pay for the lists and you actually know the recipient is interested in your community. The money you will save can be allotted to a better design of the piece. No one wants junk mail so make sure your mail piece doesn’t look like it. Plus, this gives you a chance to really express your business’s uniqueness without worrying about costs.

I love the idea of integrating snail mail marketing with social media efforts. If you include a call to action on your mail piece involving your social media sites, your mail recipients might begin migrating there. This could eventually lead to the elimination of the mail pieces thus saving you money. It would also be a plus to have them interacting on your social sites.

I am not saying that everyone should be using direct mail pieces, but if you are, take a step back and look at your ROI. Are you getting the results you want? Are you wasting money? If you answered yes to either of those, you need to come up with a new strategy or maybe eliminate the entire campaign. You must first identify why you have a problem before you can fix it.

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