September 26, 2002
Marketing urban homes in turbulent times
By LESLIE WILLIAMS
Yet, the housing market in downtown Seattle is vastly different than it was 12 to 24 months ago. We’re seeing significant differences in all aspects of the buying process, including who, what, when, why and how people are buying homes today. These differences are important to know, and essential to sell. As the buyer’s approach is inherently different, so, correspondingly, should the sales approach.
Two years ago, urban developments virtually sold themselves. Pre-sales were common, as were same day offers. Price points and locations were primary deciding factors. Many purchases were investments. Some were second homes, others rentals. The market was so hot people could simply buy at pre-completion prices, hold only until the development was up and sell at a profit. Or they could rent with a positive cash flow with tenants lined up at the door.
The dot-com buyers had unlimited money, so decisions weren’t crucial. If necessary, renovations, remodels and change orders could fix anything they didn’t like.
Today, most buyers are purchasing a home as a primary or secondary residence for themselves or for a relative. Understandably, urban buyers today are much more discriminating and more demanding when purchasing a condominium as a conscientious lifestyle decision. It is rare for them to walk in and buy on their first visit now.
Today’s market demands urban developments meet consumers’ long-term needs and desires. Whereas suburban condominiums are often purchased as a stepping stone to single-family homes, urban condominiums are becoming more of a permanent, lifestyle decision.
Long-term lifestyle choices
Years ago, the job of an agent, or a property’s marketing effort, was to sell the condominium lifestyle and to induce renters to become homeowners. Now, more than a third of the target market for downtown condos are already living downtown or in another condominium elsewhere. The vast majority, over 75 percent, are already homeowners.
In many cases, the buyer is living the urban lifestyle either in downtown Seattle or in another city; they are already a condo owner and are very savvy. The decision to buy is not between a single-family home and a condominium, it’s simply a choice among condominiums. Accordingly, clients need to be sold on the unique aspects of a development, and why they should choose this condominium home over another.
More knowledgeable consumers
Existing condominium owners are more versed in the construction process, maintenance issues, and the benefits of certain exterior finishes and construction methods. They are intimate with what’s available on the market and understand the sometimes subtle differences between developments.
To sell to this smart, repeat condominium buyer, real estate agents need to be industry-savvy. Agents need to draw from a comprehensive understanding of the real estate market (including past, present and future trends) rather than a simple snapshot of the current market.
Longer sales cycles
Because decisions are more conscientious, agents need to be prepared for longer-term relationships with buyers. Homes have been sitting on the market just a bit longer (five days longer in King County, to be precise) than this time last year. In general, it’s taking four to six visits to sell urban homes. Rather than simply closing a deal, agents need to be able to gain the respect of buyers and be capable of intelligently advising consumers in the purchase of a home. Instead of shooting to close a deal, agents should aim to make another appointment (or two).
Forethought for development
While the market is a bit tighter than last year, it is expected to get even tighter in the coming years. Successful developers will get solid, professional advice before starting construction. When the builder is at the preliminary schematic stage, they should consult the potential buyer pool on issues of aesthetic appeal and interior space allotment. The type, size, mix and feature set of homes should be strategically aligned to meet consumer demand. Attention to these details will pay off with the homes’ subsequent success with the consumers, time on the market, and allowable price point.
There may have been a time when a blanket marketing plan and a reasonable price would work to sell any development. In today’s market, however, successful selling demands more real estate experience, strategic feature sets and individualized marketing plans. It requires some insight to the emerging target audience and it requires matching each unit design with the target buyer. It involves a market strategy that evaluates pre-selling considerations, potential for options and upgrades, and a competitive pricing structure.
Unlike selling to yesterday’s investors, more strategic marketing and knowledgeable sales agents will be essential to selling tomorrow’s urban homes.
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