Strategic Residential Marketing

For those of my readers who may not be into Jazz or are younger than I (that would be the majority), “Take the ‘A’ Train” is a jazz standard by Billy Strayhorn that was the signature tune of the Duke Ellington orchestra and is arguably the most famous of the many compositions to emerge from the collaboration of Ellington and Strayhorn.  Composed in 1933, after Ellington offered Strayhorn a job in his organization and gave him money to travel from Pittsburgh to New York City, Ellington wrote directions for Strayhorn to get to his house by subway, beginning “Take the A Train.”  Interestingly, NASA honored the composition with the creation of the A-Train satellite formation which placed 5 satellites in sequential orbit, providing scientists with different sets of nearly simultaneous observations so they were able to improve their study of climate change.

There was an interesting article posted today on Reuters.com with the headline “Homeowner confidence fell in second quarter: Zillow”. The story went on to state that “Homeowners were less confident about the value of their homes in the second quarter, with one-third believing home prices had not yet reached a bottom…Nevertheless, a significant number of homeowners said they planned to put their home up for sale in the next six months if they saw signs of a real estate market turnaround.”

I was sitting in a community sales office today waiting for the sales team to finish their morning chores.  This community is well conceived and professionally marketed and continues to maintain a healthy sales pace and profitability for the developer and the homebuilders.  When the sales team and I got together I started our discussion by sharing this article with them and asking their opinion.  Universally, the immediate response was negative, ranging from “that’s why we are having trouble selling Windstone (a move up village)” to “it seems that this bad market will never end”.  

My immediate thought was “we need a new sales team”.  But after a moment’s reflection and recognition of the reality of the marketplace today, that thought changed to “we need more sales training”. Read the rest of this entry »

The quotation above is attributed to John Heywood, a fifteenth century English writer. It closely resembles several Old and New Testament verses, most notably Jeremiah 5:21 (“Hear now this, O foolish people, and without understanding; which have eyes, and see not; which have ears, and hear not”) and Matthew 13:13 (“Therefore I speak to them in parables: because they seeing see not; and hearing they hear not, neither do they understand”). So this concept has been around for quite some time.

Yet it appears that the message is not being received and I am now well past the point of frustration in advising homebuilders and developers to simply look at the market to determine what will sell and hearing their automatic response of “you do not understand that things are different here and we cannot do that”. The fact is, things are not different here, there or anywhere else as the market is the sole determinant of where our buyers will live, what size and type of home they want and what they will pay. It does not matter what was the cost of the land or improvements, what the architect believed to be an attractive or appropriate design, or even who the builder is or how they do business. While the specifics of the consumers’ decisions will vary somewhat depending on geographic location, the national and local economy, the job market, interest rates and consumer sentiment, the homebuying market will always make their desires quite clear and all we need to do to succeed is look, listen and comply.

When homebuilders and developers fail to see, the only available course of action to sell the homesites or homes is to lower the price (or otherwise enhance the offering) until they have created such a visibly superior value that it overcomes all other concerns. But that typically results in losing money which has an obvious and undesirable long-term result. We can provide a superior sales environment and selling process, better merchandising, advertising and promotion and those efforts will certainly produce benefits and are worth pursuing. But without the underlying correct location, acceptable home design and features, and proper pricing, we are at best merely spinning our wheels while on the inevitable road to failure. Read the rest of this entry »

I have always found the phrase “be prepared” of special interest, perhaps due in some small part to my enjoyment of musical satirist Tom Lehrer’s song parody from the 1950s.  If you are not familiar with his work, here is a link, hope you find it enjoyable – http://www.youtube.com/watch?v=fSwjuz_-yao.

Recently I had a birthday.  I had stopped celebrating several years ago as the candles were setting off the smoke alarms.  But this year promised to be something special as my son had flown in from Boston with one of my grandsons to celebrate with us.  And “special” it was, although not quite as I had envisioned even though the cards and emails from over one hundred of my social media friends were certainly appreciated.

Several months ago I had coincidently scheduled a doctor’s appointment on my birthday as I try to make those appointments early Monday morning so that I may travel to clients Monday afternoon.  This appointment was for my regular six month check-up but when the doctor looked at my chart and noticed that it was my birthday he decided to do something that he thought was “special” so he drew a smiley face on his exam glove for my prostate exam.  He found this quite amusing; I did not and should have known then that the day was not going to go as had been expected.

After the exam I returned home to pick up my son and grandson to meet my mother-in-law for breakfast. The meal turned into an unanticipated extended event as, after waiting for our food for forty-five minutes, an “extra-special” treat when one of the diners is a three year old, our server realized that she had not turned the order in to the kitchen.

Now rushing to complete a few last minute errands before taking my son and grandson to the airport for their return to Boston, a phone call from my wife informed me that my mother-in-law had fallen on returning home from breakfast.  As she had struck her head, the paramedics were taking her to the only level-one trauma center in the area, the county hospital 35 minutes away.  I drove the kids to the airport and raced to the hospital to join my wife where I sat for the next seven hours while Grandma was immediately examined but then left virtually unattended for the next five hours until admitted for overnight observation.

My mother-in-law is fine, a hairline fracture of her nose, some bruising and injured pride and vanity.  But the day was shot, no “special” birthday celebration for me.  All I had time to do was snarf down some fast food, race home and pack for my 6 AM flight the following day.  Fortunately, I am a follower of the creed “be prepared” and had updated all of my client files and materials for my trip several days in advance so that no serious harm was done, just minor annoyances in the great scheme of things.  And I did have the opportunity while at the hospital to make some new friends – but more on that subject in a future blog.

The point to this lengthy introduction is that the world will constantly throw things at us that we do not expect.  To survive we need to be adaptive and flexible and that can only be achieved by being prepared.  That is true in the homebuilding business as well as in every other aspect of our lives. Read the rest of this entry »