The market for new homes has slowed a bit since the buying frenzy of 2021. Though it’s still a tight market, inflation, rising interest rates, and the ups and downs of global events are causing many buyers to pause before moving forward with a new home purchase.
A slightly less voracious appetite from buyers doesn’t mean homebuilders will end up sitting on inventory. Instead, it’s an opportunity for builders to zero in on the types of product and marketing messages that resonate with today’s buyers.
As real estate marketing consultants with decades of experience partnering with homebuilders in California and Nevada, we have seen market fluctuation from all sides. Here are some effective strategies to connect with buyers and keep inventory moving.
A new spin on adjustable-rate mortgages
Adjustable-rate mortgages (ARM) provide an opportunity for some buyers who may have previously felt shut out of the market. Today’s 5/1 and 7/1 ARM loans have been reshaped to avoid the problems with adjustable-rate mortgages that played a significant role in the Great Recession.
Current ARM loans combine a lower introductory interest rate period with the stability of a fixed-rate loan. This structure provides an incentive for homebuyers to act now, as well as some of the protections of fixed-rate mortgages that can alleviate concerns around the rate’s variability.
With a 5- or 7-year period in which the rate remains fixed (usually below market rate) and annual and lifetime caps on the amount the rate can increase, buyers can get a sense of how their monthly mortgage payments will change over time.
ARM loans appeal to lots of buyers with different needs. For example, buyers who are only planning to live in their home for a five- or seven-year period may move on before they see their interest rate change. In other instances, first-time buyers who are trying to enter the market may find the lower introductory rate enticing.
Here’s how you can incorporate the advantages of today’s adjustable-rate mortgages into your real estate sales and marketing efforts:
- Educate your sales teams on the details of these loan programs and how they can provide an advantage for some buyers. Answering initial questions in the sales office can change some of the outdated perceptions buyers may have regarding adjustable-rate loans.
- Work with your preferred lender to generate marketing collateral to educate buyers. Think beyond in-office printed materials and consider dipping into digital marketing tools like video content, webinars, and live online Q&A sessions.
- Collaborate with real estate marketing consultants to develop attention-grabbing advertising and sales materials like printed banners, billboard ads, newspaper features, and radio commercials featuring the benefits of a lower introductory interest rate.
Energy efficiency as an advantage
During decades as established real estate marketing consultants for homebuilders, we have seen today’s buyers become acutely aware of their energy and water consumption. Prices for electricity, gas, and water are likely to remain high, so buyers are recognizing the value of efficient designs to protect the planet as well as their pocketbooks.
All California homebuilders are incorporating energy efficiency into their designs under Title 24, but not all are capitalizing on this selling point when communicating with buyers. Detail the water- and energy-efficient designs and products in your new homes and run some sample numbers to show estimated savings projections. This type of concrete comparison helps buyers see how buying a home in your community is a wise financial investment.
Don’t back off communications
Attracting and keeping prospective buyers’ attention is a crucial first step in building a connection with your brand. Don’t let a lull in the market create attrition in the prospect lists you have worked hard to build. A slowing market is a sign to ramp up communications with the people on your interest list. Keep them involved with what’s happening in your communities.
Creative marketing content like virtual home tours, interactive floorplans, and short brand videos keeps buyer interest stoked, even if they’re not ready to commit any time soon. Frequent content releases on digital platforms as well as “in real life” keeps curious buyers engaged with your brand and keeps your communities top of mind when they are ready to take the next step.
Opportunities are all around you
No matter which way the market continues to shift, builders should adjust their sales and marketing strategies to address current buyer hesitations and help buyers envision themselves living the lifestyle your community promises. This means conducting comprehensive market intelligence, tailoring your sales efforts to reflect what is happening in the market today, and working with seasoned real estate marketing consultants who can help you organize, execute, and track your sales strategies.
Flexibility should always be built into your sales process. As the market follows a perpetual ebb and flow, the question is: who will be ready to take advantage of the emerging opportunities?
See how our team of experienced real estate marketing consultants can help you sell more homes faster. Contact The Advantage Group today and let’s start a conversation.