Archive for the ‘Green’ Category
Finding The Sweet Spot In The Luxury Market
Posted by Sibet B Freides in Green, Marketing, Real Estate Trends, Sales on August 18th, 2010
Builders everywhere are trying to design new homes with the latest in sustainable technology while trying to maintain a high profit margin. There are several experts that see unstoppable reduction in profits for new homes. Most of them think that this is a change that builders need to start accepting for the future.
Builderonline.com has a great article featuring a builder, Bill Freeman. Freeman built a 3,000-square-foot house in Essex, Conn. with complete dedication to energy efficiency and savings. What he found out was that it’s difficult to build a large and luxurious home with a high HERS rating. He then called in a consultant who helped make a few minor tweaks to increase its rating. Tweaks along with his initial plans cost him more than usual, which will ultimately result in a lower profit margin.
The reality of the market is that striking a balance between profit and sustainability is a challenging task. In Freeman’s words, “A lot of builders don’t like hearing that, but it’s the reality now.” The challenge, especially in the luxury real estate market, is continuing to provide consumers with what they want while also obtaining high-energy efficiency scores and sustainability certifications.
All of this will certainly dictate how we market these types of homes. Just like new home designs, we must also strike a balance between luxury and sustainability in our messages. It is also important that sales agents are able to strike that balance when dealing with potential buyers.
As home building starts to pick up, everyone involved in the building and selling process needs to be on the same page when it comes to finding the sweet spot in the luxury market.
Are You Wasting Money On Your Developments?
Posted by Sibet B Freides in Green, Marketing, Real Estate Trends, Sales on August 17th, 2010
Builderonline.com has a great article titled “50 Ways To Waste Your Money.” It’s on their website and in this month’s issue of builder magazine. If you haven’t read it yet, I suggest you do so here.
It’s a lengthy article but it’s worth a read in its entirety. I naturally enjoyed some of the more marketing and advertising focused tips. Here are a few of the ones that I really liked.
Don’t Train Your Salespeople To Explain The Value Of Energy Efficiency
I have talked about this before but when you build a sustainable home and obtain a certification for it, it might not matter if you don’t have the proper people selling it. How can an untrained sales person sell something they don’t know anything about? You better believe that buyers who are attracted to your product because of its Earthcraft certification are going to have some serious sustainability questions. Salespeople need to be able to talk the talk when it comes to selling sustainable homes.
Neglect Your Website
According to the article, a third of home buyers rely on the internet as their first step when searching for a new home and 94 percent of buyers use it as a tool to search refine their choices during the buying process. Knowing this, I am not sure why anyone would neglect their website to save money. A lot of developers also make the mistake of not updating their websites regularly. Webmasters may be expensive but I would avoid the temptation of cutting costs in this department.
View Technology As A Cure-All
A lot of us are excited about the advancements of the web and mobile devices. The article issues a sound warning to those who may be relying on technology to do old things more efficiently. Experts believe that these new technologies, especially mobile ones, should be used in new, effective ways to create sales and leads. If you rely on these new technologies to execute old strategies, we are selling ourselves short.
These of course, are just a few of the ones that I really like. There are 47 more that touch on building, marketing, consumer research, and design. It is a read that is well worth your time.
How Big Can A Certified Sustainable House Be?
Posted by Sibet B Freides in General, Green, Marketing on August 11th, 2010
It’s an interesting question and one that certainly needs to be answered. According to the U.S Green Building Council’s LEED program, a large house can indeed be certified. This doesn’t mean that it goes without penalty of course. Any home over 1,900 square feet applying for a LEED certification will lose points. Is that it?
It is a compelling argument right now. Boyce Thompson has a pretty interesting article about it over on Builderonline.com. He clearly thinks that larger homes shouldn’t be certified but he also respects the counter arguments.
I am having trouble understanding how a home with several unused rooms can be considered sustainable. Isn’t this the complete opposite? Should water saving toilets and fixtures really help a mansion qualify for a sustainable certification? It seems there are mixed opinions and as Thompson states in his article, “The many competing standards in the marketplace make comparisons very difficult.” Since there is no set standard in certification, who wins the final argument on what is sustainable and what isn’t?
This can be confusing for consumers and builders. Until there is a set standard in sustainable certification I think things will continue to be confusing.
Look Beyond Square Footage
Posted by Sibet B Freides in Green, Marketing, Real Estate Trends on August 6th, 2010
A reduction in square footage in new homes shouldn’t be viewed as a bad thing. In fact, consumers are actually looking for homes that are smaller, include sustainable features, and are high customizable.
This doesn’t mean that builder should down scale their current floorplans, add Energy Star appliances, and give buyers a choice of finishes. Creating a smaller yet attractive floorplan is somewhat of an art. Lucky for us there is an article on Builderonline.com that hits on a few strategies when it comes to successfully downsizing floorplans. It turns out that it involves more than just removing a bedroom or a closet.
According to the article, creating an attractive floorplan less than 2,000 square feet involves strategically placing windows and adding character wherever possible. Buyers are still looking for a nice space to call home and a reduction in size makes the need for character more important than ever. Ideas include varying the heights of ceilings in different rooms which adds depth to the home’s design; placing windows at the end of hallways and including natural light are key aspects in design.
We can’t forget about the importance of high-end and customizable features within the home. Just because buyers are looking for smaller floorplans doesn’t mean they are skimping on the overall living experience. A compromise in space will surely mean an expectancy of nicer fixtures and details. This is especially true with Generation Y buyers.
Smaller homes are definitely in demand, which will continue to grow. Be sure to strategically plan your new homes by looking beyond a reduction in space and focus on an increase in character and customizable options.
How The Recession Is Shaping The Future Of Real Estate
Posted by Sibet B Freides in Green, Real Estate Economics, Real Estate Trends on August 5th, 2010
Many experts believe that the developing demographic trends we are currently seeing will drastically affect the demand for future rental properties. After reading a report on James Chung’s webinar its is hard to argue otherwise.
In his presentation, Chung reviewed several factors that will directly shape the market. Included is the expansive growth of the US population. In Chung’s words, the positive growth of a fully industrialized country is very positive for the real estate market outlook. The point is that market demand and its marketing will completely rely on this growth. As preferences shift so does the market.
While it’s a challenging task, it is a positive one. According to Chung, the economic climate that the boomers and Gen-Y face will directly shape the majority of demand for tomorrow’s market. This makes complete sense when you consider the shear numbers of these two generations. . Whatever economic hardships these generations face now will determine what builders will be focusing on in the future.
According to Chung, the direction we are heading leads to an increased demand in rental property. Reduced incomes will cause this increased demand for rental property.
The change in consumer attitudes towards health change is driving more than just healthcare but also where people want to live. Consumers will want sustainable and healthy homes. We all understand that people want sustainable homes for energy savings but we also need to remember that they will want them for health reasons.
On a positive note, Chung assured participants of the webinar that the change in the market will be a positive one as long as developers recognize the changes and differences. In his words, “As bad as the recession was, it has corrected the market and has presented a window for reinvention.”
How To Properly Market A Green Home
Posted by Sibet B Freides in Green, Marketing on August 4th, 2010
There is a great article on Builderonline.com that presents 10 steps to effectively advertise a high performance home. Some of the points seem a little obvious but the key to the article is bringing all of the points together to really drive a successful green home marketing campaign. You can read the article in its entirety here. Below are some of my favorite points.
#3 Integrate Green Into All of Your Marketing and Advertising
If you’re going to identify your product as being sustainable and energy efficient, you need to make sure that the message is being accurately carried out in everything you do. This includes property inserts, signs, social media, e-blasts, etc.
#1 Use an Established Brand That Requires Third-Party Certification
This is an absolute must. Not only will this improve your image in the minds of buyers but also making claims without these third-party certifications can actually get you in a lot of legal trouble. Going through the certification process can be time consuming and it will cost you but in the end it’s worth it. Consumers will be looking for the sustainable buzzwords.
A mix of #4 and #5
Training your sales force is crucial when it comes to selling a sustainable home. If they are not equipped with the proper knowledge it will difficult for them to sell the attributes. This makes the other point obtainable. By training your sales force you are empowering them to incorporate a green initiative in every step of the selling process. This includes understanding a buyer’s wants in a home and offering data to show the money that will be saved with energy-efficient features. Whatever a sales agent is good at, they can then incorporate green knowledge into their specialties.
I highly suggest reading this article if you haven’t already. Its full of great points that are very applicable to a changing market.
Striking A Balance Of Classical Architecture And Sustainable Design
Posted by Sibet B Freides in Green, Real Estate Trends, Sales on July 30th, 2010
It might surprise you that there are a lot of LEED and Earthcraft certified homes out there that manage to encompass traditional architectural elements. In fact, experts say that the classical architecture of some Southern homes is as green as it gets. Where most would consider the big wrap-around porches and tall shutters of classic Southern architecture to be aesthetically pleasing, the truth is that these features were designed to enable passive heating and cooling without mechanical help.
Developers, architects, and builders are building homes that are not only sustainable environmentally but also with floorplans that provide comfort and utility suiting consumers in multiple life stages.
A recent Builderonline.com article talks about a project in Washington, D.C. that has successfully designed and built a product that has earned a LEED for homes certification and has also established a strong architectural similarity with the historic Capitol Hill district nearby.
The goal of homebuilders now is to strike a successful balance between energy efficiency and classical design, resulting in a more sustainable product. Up until recently we have seen LEED and Earthcraft certified homes incorporating very contemporary designs. These home designs also aggressively showcase the sustainable features incorporated. These new homes in Washington, D.C. do the opposite. They tastefully mask their sustainable features allowing more classical and sustainable aesthetics to shine.
If builders are able to successfully strike the balance of sustainability and age-proof design we are going to see a lot of meaningful and efficient communities in the future. It’s going to be interesting to see how far the modern designs can go in comparison to the more traditional ones that still successfully incorporate energy efficient features.
How Important Is Walkability?
Posted by Sibet B Freides in Demographics, Green, Real Estate Trends on July 22nd, 2010
Walkability is becoming increasingly important to home buyers.
According to a WSJ.com article, consumers are willing to pay a substantial amount more for a home that has shopping and eating locations near by. An example they use is a couple from Oregon who chose a home not solely based on the actual house but how close it was to coffee shops and wooded paths. You can read the article here.
Most of the article talks about a service called Walk Score. This website allows users to input an address and obtain a score on how walkable an address is to amenities in the area. The service has become extremely popular with real estate companies and home buyers.
When you think walkable, think beyond urban. Think about master planned smart communities that are incorporating main streets into their designs. Consumers are willing to live in smaller homes that are closer to neighbors as long as they are able to walk to eating and shopping. Most smart code communities have a main street that runs through the middle of the community. They also have natural walking trails too.
It seems that natural amenities and walkability are major selling points in the housing market right now. The article makes an interesting point about why the demand for walkability is increasing which points towards age demographics. The boomers are retiring and want smaller spaces and a community where they can walk. Generation Y wants a smaller home as well but are also interested in being green and saving money on gas.
Whatever the reason, these are desires that shouldn’t be ignored. You will see these things rather naturally in urban settings but master planned communities will have to take special interest in these things in order to stand out to home buyers.
The Aggressive Green Market
Posted by Sibet B Freides in Green, Marketing on June 30th, 2010
As more bargain foreclosures enter the market and existing home prices continue to drop, things aren’t getting easier for builders.
While things seem to be improving slowly, some developers and builders have figured out that aggressively marketing their green homes may be to the key to their success. A new neighborhood in Arizona called Lyon’s Gate, which opened this past weekend, features some of the most cutting edge green technology seen in master planned communities yet. The big feature is the advanced solar electric and thermal system that generates twice the energy per square foot of most solar panels today. To top it off, homeowners can control and monitor their systems from a computer or even their cell phone.
This is amazing considering that this sort of technology wasn’t even available this time last year, according to a WSJ.com report. These features are not cheap and the developer was actually able to install them due to the deal they got on the community’s land last year in the wake of falling prices.
It will be interesting to see the end result of this community experiences. I believe that the builders that are embracing green practices and marketing accordingly will see the greatest return in the next few years. Meritage Homes, owner of Lyon’s Gate, was in a great position to install these sustainable features in their homes. The cost of the land made the decision to install them easy. Future properties will not be so lucky and I wonder if competitors will try to match their prices with a similar product. These are the interesting scenarios that I cant wait to see unfold as the market recovers. I think we will see a clear distinction in the strong and the weak when it’s time to start building again.
Green Roofing On The Rise In Major US Cities
Posted by Sibet B Freides in Green on June 11th, 2010
According to a Builderonline.com article, a recent survey conducted by Green Roofs for Healthy Cities of its corporate members indicate that the green roofing industry grew by 16.1% in 2009. This correlates with the numerous reports of a thriving market focused on sustainability. While most home markets struggled in the last two years, communities that focused on green practices performed much better.
A green roof is one that consists of layers of vegetation including soil and then some type of vegetation planted. The benefits of these roofs are numerous and include insulation and energy efficiency. They also help society as a whole by producing clean air and reducing stress on the sewer system through storm water retention.
Green roofs are becoming very popular when it comes to new construction and the retrofitting of old buildings. Chicago is the US leader in green roof installation and has made a strong commitment to their implementation back in the early 2000s.
The City Hall building in Chicago was fitted with green roofs and recorded summer temperatures 14 to 44 degrees cooler than a county office building just across the street. This is a significant decrease in temperature and many believe it could drastically reduce energy costs for buildings.
Green roofs are something that I think will become more popular over time. The energy benefits are outstanding and the idea of turning these green roofs into rooftop gardens could be very appealing to commercial real estate. This all promotes a healthy and sustainable lifestyle and I think we will be seeing it adopted on a large scale in multi-family living projects.
Below is a list of the top 10 cities for Green Roofs:
1. Chicago, IL
2. Washington, DC
3. Minneapolis, MN
4. Baltimore, MD
5. Newtown Square, PA
6. New York, NY
7. Redmond, WA
8. Montreal, Quebec (Canada)
9. Quebec City, Quebec (Canada)
10. Milwaukee, WI
