A Boost in Builder Business: Selling the Home Builder

The year 2013 showed positive signs in new home construction as well as existing home sales — a trend that is expected to increase in 2014.

 While real estate sales in most major metropolitan cities never reached the lows that other areas in the country did, even the states that were hardest hit (i.e. Arizona, California, Florida, Nevada) are reporting a slow return to normalcy in home sales.  And by “normalcy,” they mean before the banks went insane with irresponsible lending and balloon mortgages.

Of course there are some states in the union that are doing better than others. Both Texas and North Carolina, for example, have been experiencing an influx of home buyers who are relocating from states where the cost of living – and particularly home sales – remains out of reach for retirees and those wanting a better quality of life.

In Texas, lighting industry professionals and real estate agents point to California as one source of the population swell in the Lone Star state. “Californians are coming to Texas because they can enjoy a better quality of life – including a larger home – than they could for the same money in California,” says lighting rep Barbara Jordan of Bill Ferber & Associates in Dallas.

Joe Reider, a licensed Realtor with Keller Williams Realty in Austin, says the population in the capital city has been growing steadily. “The latest stats that I recall is that Austin is at about 890,000 residents right now and by 2024 they expect it to be around 1 million. Approximately 170 people per day are moving to Austin. The home inventory in Austin is at about three months or so right now,” he states.  “Builders are having a hard time keeping up. The demand for new construction as well as resale is expected to increase. The year 2014 is projected to be hot for home sales for Austin.”

There has been also growing interest in “green” homes, according to Reider. “Austin is big on the HERS (Home Energy Rating System). Home energy ratings can be used for either existing or new homes. For example, a HER of an existing home allows potential buyers to receive a report listing options for upgrading the energy efficiency. Having the HER of a new home allows buyers to compare the energy efficiency of the homes they are considering buying.

So many people have moved into the Austin area that Reider has created a Web site and blog called “Home Style Austin” (homestyleaustin.com) to make out-of-towners feel comfortable exploring their new city and shares local hot spots for dining, design ideas, and includes a free guide to Central Texas gardening.  “Home Style Austin is just a fun side to my real estate business. The content is more lifestyle than real estate. I want to share the cool, fun stuff that my family found along the way here in Central Texas,” he explains.

Some of the amenities home buyers are asking Reider for are wet rooms that are luxuriously spa-like with water jets all around, and built-in shower seats or benches you can lay on in a steam shower. “Buyers are definitely interested in materials with texture, such as stone or tile,” he says. “They are also asking where the wood comes from and what kind is used on the floors.” Other amenities increasing in demand are wine cellars that include a tasting area or tasting room. Outdoor kitchens remain immensely popular, as are homes that offer a fully wired electronics and security system that can be controlled by a smart phone.

Brian Howard, showroom manager and lighting buyer at Lights Unlimited Inc. in the Raleigh, N.C. area, has noticed an uptick in building activity. “The year 2013 was the best year we’ve had in several years,” he recounts. There is a lot of growth among the production builders as well as custom homes. We’ve never been this busy in the month of December before! I’ve found that most customers are willing to spend a little more money on lighting if they are planning on spending several years in the home. Some of the new construction customers are those who just purchased a production home and want to upgrade certain fixtures.”

Howard has observed a lot of people moving to the Raleigh area from out of state. North Carolina has become a popular destination for retirees from the Northeast who are drawn to the more affordable cost of living as well as the warmer climate. There are also customers who are finally ready to upgrade the lighting in their second/vacation home. While Lights Unlimited doesn’t send out specific marketing messages targeting builders or new homeowners, the company does spend approximately $800 a month on a local pay per click campaign online. “That’s been a big help,” he says.

Jack Fleischer of Hermitage Lighting Gallery in Nashville says his business has been brisk, even when other areas of the country were contending with a downturn in real estate. As the city’s population has noticeably increased, organizations such as Building Nashville are making a concentrated effort to keep jobs local and growing. Nashville is estimated to invest more than one billion dollars in local infrastructure construction over the next 10 years. One of the most widely anticipated projects is the $65 million baseball stadium, which will reportedly lead to increased residential construction activity.

Although Nashville is best known for its place in country music history, it is also home to 300+ health care companies that contribute $30 billion per year and 200,000 jobs to the Nashville-area economy. According to U.S. Bureau of the Census, Nashville ranks #10 in population growth nationwide at a rate of 1.7 percent from 2011 to 2012 and is estimated to be home to approximately two million residents by 2020. (Austin beat Nashville’s population numbers with three percent metro growth. Coincidentally, the American Lighting Association (ALA) will be holding its 2014 Conference in Nashville.

Other areas of the country that are reporting a surge in home buying activity are California and Arizona – which were two of the hardest hit real estate markets – and the Pacific Northwest, where companies such Boeing, Microsoft, Apple, Starbucks, and Amazon are headquartered and continue to attract plenty of young, affluent homeowners.

About Edward Frebowitz
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