Strategic Residential Marketing

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 »

The new division president of a major homebuilding company spent a week at his new office with the individual he is replacing becoming acclimated to the organization and the local market specifics. On the last day the departing president tells him, “I have left three numbered envelopes in the desk drawer. Open an envelope if you encounter a crisis you can’t solve.”

Three months pass by and there is a major “situation” where ‘you know what’ hits the fan. The new president remembers the parting words of his predecessor and opens the first envelope. The message inside says “Blame your predecessor!” He does this and gets off the hook.

About half a year later, the company is experiencing a serious drop in sales, combined with major production problems. The president quickly opens the second envelope. The message read, “Reorganize!” He fires the marketing director, sales manager, the advertising agency and the construction manager and with a new staff on board and a new enthusiasm throughout the company, sales rebound and the construction issues are corrected.

At the end of the first year another crisis occurs and he opens the last envelope. The message inside reads “Prepare three envelopes!”

I went to the doctor last Monday as I was experiencing some problems with my back. After an examination he prescribed an anti-inflammatory and a heating pad and five days later the pain was gone. I would not suggest that this was a miracle cure as I have a chronic problem with my L4, L5 and S1 discs which is a common cause of Sciatica, typically manifested by a pain running down one or both legs in a pattern determined by the sciatic nerve. But nevertheless, I was quite happy that the pain was now gone, that its cause was nothing more serious and that I had made the decision to promptly seek the aid of a professional in the medical field instead of procrastinating in the hope that a healing would occur spontaneously.

This entire incident could probably have been avoided as my disc problem is not new and when it last was bothering me I visited an orthopedist who recommended a regular course of exercise to strengthen the surrounding muscles. But when the pain went away last time after a few weeks of following the prescribed course of action, I became complacent and the exercise program was soon forgotten.

It would therefore appear that the homebuilding industry and I share a common history. When the housing market was strong in the first few years of this decade we forgot the “course of exercise” that had been prescribed in the last downturn. And when the market slowed down we were unprepared for the pain. Read the rest of this entry »