Election year challenges for the homebuilding industry.

My wife and I took advantage of early voting this year, something that we do whenever possible.  The lines are short and we can vote at our convenience.  I am certain that my upbringing is also a factor as I was raised in Chicago where the motto was “vote early and vote often.” 

This election was an especially unpleasant and embarrassing prospect considering the candidates that were the choices presented to Florida voters this year.  My wife asked me for a recommendation on the candidates in one race and, when I responded with my choice, she replied, “So you believe that the female crook is preferable to the male crook?”  That sums up our personal election experience but I guess that residents of several other states have similar challenges, as typified by one candidate for the U. S. Senate in a northern state that is apparently so unqualified for office that she appears to be totally unfamiliar with the Bill of Rights, something that I recall was required studying in civics class many years ago as required under a Public Law.  I have to wonder if the political parties on both sides of the aisle have run out of honest and qualified candidates or if they simply believe that the electorate is too stupid and uneducated to care. 

Especially time consuming this year was the task of voting on the several state constitutional and charter amendments on the ballot, many of which were so poorly written (Proposition 4, for example) that the implementation, although supposedly beneficial, would negate any benefits.  I voted against Proposition 8 which was apparently intended to compensate for some of the current economic challenges.  As I understood the proposal, the authors wished to eliminate previously enacted limitations on classroom sizes.  But instead of stating this goal in simple terms, the wording of the proposal in my opinion dishonestly suggested that instead of increasing classroom size they would be merely be “averaging” the totals.  While that may first appear to be harmless, the reality to me was that if approved and they had only 4 special needs children in an autism or EMH special education class, they would then be allowed to increase a “traditional” class to 50 students.  Although my vote against the proposal will personally cost me money in increased taxes, the educational system in the U.S. has continued to deteriorate to the point where we are now at the bottom of the ladder among industrialized nations and Florida is at the bottom rung so I saw that I had no choice but to vote against my own pocketbook and the proposition.

Later that day, I received positive reinforcement for my decision when we stopped by Target to arrange for our annual family photo over the Christmas holiday when our son, his wife and our grandchildren will again be down for a visit.  The young lady that scheduled the appointment asked how many total people would be in the photo shoot and my wife replied “eight”. The clerk then asked how many children and their ages and my wife responded “two children, ages 4 and 1.”  The next question caught my wife by surprise and she hesitated before answering and gave me a long look when the young lady then asked “and how many adults?”

Education is critical to the future survival of our country and equally so to the future success of the homebuilding industry.  In these challenging times, I continue to be amazed that within our industry it appears that education has been all but eliminated.  Registration for industry seminars and classes is down substantially as was attendance at the programs offered at the International Builders Show in Las Vegas.  And it is just not the classes and seminars that are being ignored but also the specific essential education about the market and the customers that is not being pursued.  While I can understand that funding is tight at all levels in this economy, are we simply hoping that we can stick our heads in the sand and the challenges will go away?

In one of the markets in which I am active a homebuilder is in the process of having new housing products designed.  While this is a an intelligent course of action as their previous designs did not sell until the prices were heavily discounted, the total background and input on which the new designs are being prepared resulted from a fifteen minute conversation with the sales staff that suggested that, based on casual customer feedback, the home sizes needed to be smaller.  No market study was initiated, no consumer focus groups took place, and no exit interviews were conducted on the visitors that did not purchase.  This builder is operating within a total vacuum of information and I am certain that the home designs that will result will be incorrect.   Why would any builder invest hundreds of thousands of dollars in new plans and new models that are designed solely on supposition or the builder’s “gut” feelings when for a minimal investment of time and money the true desires, wants and needs of the market could be identified and translated into new housing designs?

In another market I watched as a developer was successful in attracting a new builder to their community.  Although the developer had correctly decided that a less expensive housing product was required, it appears that this was the only input given to the homebuilder and that neither the builder nor the developer did any real research.  The resulting home, built as a model, is a repeat of a plan that the builder had used in another market and it was slightly less expensive but it included a design that was inappropriate for this specific market and it was simply ugly.  Needless to say, it has not sold and this unattractive home now sits visibly at the entrance to the community, an unwelcome introduction to the neighborhood, while the builder is designing new plans. Again, the lack of commitment to education, in this case the education necessary to create an intelligent strategy to satisfy the market, resulted in needless costs and lost income to both the builder and developer.

The housing market will probably remain challenged for the next two years.  To achieve success and prosper we all need to invest in education.  Sales professionals must constantly challenge themselves through investment in seminars, courses, books, videos and anything else that they can find to refresh and enhance their sales skills, even if they have to make that investment from their own pockets.  Homebuilders and developers must continually invest in professional market research to create intelligent and appropriate strategies for success.  The alternative is, simply, failure.  But that’s just my opinion.

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3 thoughts on “Election year challenges for the homebuilding industry.

  1. Daniel – you freakin’ nailed it. You introduced politics into your blog with aplomb. As acidic as political discourse may be today, America needs to have this conversation because it affects us all in a way that many deem too “politically incorrect”; and yet, this is what our democracy was founded upon. We must have an open discussion about the way forward!

    At the end of the day, there is much talk about green building, and advancing the construction of our built environment. I read articles and test the waters of our market and prospective buyers seem disenchanted with the home sales process (to put it lightly). We should – no, we MUST – remove our heads from the sand. It’s a reflexive reaction to fear. To run away from this challenge is to accept defeat and complacency.

    The other beauty of our political, democratic discourse is freedom of choice.

    If we can put a man on the moon, America can retake the lead in putting up buildings that not only sell headlines on technological prowess and renewable energy and venture capital, but also make Americans happy again.

    Let’s do it

  2. Daniel,

    Once again another insightful post.

    Regarding the political discussion, I am currently reading “Restoring the American Dream” by Robert Ringer and I am recommending it to anyone who is concerned about this country.

    In response to your question “Why would any builder invest hundreds of thousands of dollars in new plans and new models that are designed solely on supposition or the builder’s “gut” feelings when for a minimal investment of time and money the true desires, wants and needs of the market could be identified and translated into new housing designs?”, I believe the answer is “Because that is the way they have always done it – and sometimes (not often) it actually works.”

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