Is the Market Shifting? (And Are You Ready?)

February 22, 2022
Valley Development Willowood

We have seen some interesting recent shifts in the real estate market that can unlock advantages for builders who are ready to act. As real estate consulting partners for builders in California and Nevada, we’re seeing opportunities in both the luxury and affordable housing markets.

However, design style, amenities offerings, and marketing efforts all heavily impact success rates. Builders must tailor their designs and sales processes to meet the demands of these types of buyers—or risk falling behind.

The market for luxury is growing

Options are king with today’s luxury homebuyer and can yield high margins for builders. During our decades of real estate sales consulting, we have observed that success in the luxury market requires builders to maintain a portfolio of high-end features ready to offer buyers. However, homebuilders must contend with the possible impact on delivery. Lack of availability and long wait times mean some materials and amenities options may open the door to delays.

Specialty materials delight buyers but can cause problems for builders if vendors fail to deliver. Builders should thoroughly vet all vendors to ensure they have specific materials on-hand and can deliver on time. Additionally, we encourage builders to maintain a suite of equally attractive alternate choices in case the original offerings are subject to limited availability or significant delays.

Luxury buyer messaging: “Live the Dream”

Luxury buyers are evaluating more than each home’s features; they are also looking closely at the type of lifestyle offered by the neighborhood and community. It’s up to builders to share the story of upscale elegance at every touchpoint.

Experienced sales agents encourage buyers to envision themselves in this new level of luxury by demonstrating models, products, and features in high-end presentations. The focus should always remain on conveying a sense of grandeur and sophistication.

Sales teams must carefully consider how the story unfolds to buyers. More than simply talking about the home, luxury home sales messaging influences the full experience, including the community’s entrance, collateral images, signage, common areas, and amenities—even the community’s name. Attention to these elements should not be restricted to the last leg of the sales process. Working with experienced real estate sales consulting partners helps builders take a holistic approach to design and marketing from the outset.

Affordable homes are in high demand

First-time buyers and those with limited budgets are also a key target audience for today’s builders. Tasked with maximizing a limited area, builders are utilizing multi-story designs, including shared common areas instead of larger individual yards, and thinking more strategically about community layout. Each of these choices protects profitability while delivering homes that enable first-time buyers to enter the market.

Options are a key selling point for these homes, too, but keeping costs down requires builders to offer a streamlined set of choices. It’s actually the best of both worlds: buyers appreciate the ability to customize their homes—but proceeding with known materials and vendors enables builders to reduce the risk of materials delays that can extend the contract period and affect delivery times.

Working with experienced partners can provide an advantage to builders during both design and sales. Real estate sales consultants are in close contact with buyers while also monitoring industry trends. Their insight helps builders focus on the amenities, features, layouts, and designs in high demand today.

Marketing to first-time buyers: “Build Your Future”

The sales narrative is also crucial when selling affordable housing. Marketing to these buyers is more about the American Dream, focusing on family, community-building, and investment in the future.

First-time buyers are excited about the process, but often require more education than experienced buyers. Sales agents should exhibit patience and tolerance for buyers who may have questions about financing tools, interest deductibility, and need detailed explanations of what to expect during construction and closing.

Marketing messaging for these buyers tends to be cleaner, more informational, and more youthful. A sharp presentation is key. They will likely have many questions and want to be shown how their choices can impact delivery and their new home’s value. Frequent communication is crucial—but for different reasons than the luxury buyer. Because they have less experience, first-time buyers often want maximum visibility into the construction and delivery process. Working with a real estate sales team that prioritizes communication will be essential.

Begin with the end in mind

The end goal for every builder is to deliver beautiful homes and make sure they sell quickly. Choices made at the beginning of a project can support or impede these efforts. Consulting with experienced real estate sales partners helps builders avoid wasting time or resources.

At The Advantage Group, we provide insight and expertise at every stage, but builders often begin collaboration well before breaking ground. Our deep experience in market trends, land analysis, buyer expectations, and competitor offerings means we provide insight that informs builders’ choices. Our history in real estate sales consulting creates an instant advantage to newer builders looking to secure a foothold in the market. Even legacy building companies turn to us for a fresh perspective on updating their image and offerings to achieve a higher market share.

As every builder knows, the real estate market is never static. But paying attention to what types of homes are in highest demand and using these insights to guide every phase of development keeps builders ahead of a shifting landscape and out in front of competitors.

Our experienced real estate sales teams are ready to help you take advantage of more marketplace opportunities. Contact The Advantage Group today to start a conversation.

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