Tammie Smoot Digital Marketing Consultant * Building Industry Specialist – 19 Years • MIRM, MCSP, CAPS, CGA, AA, Broker • 2013 NSMC Chair • 2011 NAHB PWB Woman of the Year • 2011 NAHB NSMC Bill Molster Award • 2010 NAHB MCSP of the Year! • 2009 NC Distinguished Associate of the Year!
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May I Ask a Favor? 1. 7 Brilliant Things Tammie Said 2. Facebook : Builders Digital Experience 3. Tweet -‐ #the_BDX 4. Who is Bill Barnes? 5. Thank You to our HBA Staff
Agenda • Industry Initiative 2013 • New Home Shopper Tracking Study • BDX Toolkit • Insights & Implications
Strategic Industry Initiative Expanding the New Home Market
The New Home Industry has a problem & It is 8me to do something about it! 8
What is Start Fresh. Buy New? – Large scale, industry wide campaign promoting the advantages of newly-‐built homes to home shoppers. – Comprehensive, national research plan to gain insights from both consumers and agents.
– First-‐of-‐its-‐kind consumer marketing & promotional campaign reaching millions of home shoppers in 2013. .
Examine Significant Industry Questions How is the generational cohort shift affecXng the shopping process?
How is the face of today’s home shopper changing?
Why is appeal for new growing/waning?
What are the primary barriers to “New” home purchases?
Capture “Pulse of Shoppers” How financially confident are home shoppers at the moment?
What type of appliance brands are most appealing to shoppers?
What type of incentives are most motivating to shoppers? Which options are most popular today?
Website www.star<reshbuynew.com
* Video views: >360k *Total site visits: >1.1MM Engagement: Time spent: 03:20 min
Most Popular Site Content
Start Fresh. Buy New. Digital Ads
Research Â
Insights from Home Shoppers, Recent Buyers & Real Estate Agents Summer 2013 Tracking Study BDX & Hanley Wood 17
Š 2013 Builders Digital Experience, Inc. All rights reserved.
Additions and Changes to Research in 2013 • 2012/13 National R.E. Agent Study • >4k active agents across 25 MSAs
• Completed 2nd Annual National Home Shopper Study • Added 6 new markets (31 total MSAs) • Included recent home buyers • Deep dive into “Quality” and value/cost perception • More extensive list of builders for brand awareness section
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© 2012 Builders Digital Experience, Inc. All rights reserved.
Agent Study Executive Summary 1 2
Realtors overwhelmingly rely on MLS to learn about new builder properties •
While realtors have a good understanding of why people are buying, they overestimate why buyers work with realtors •
Buyers look to realtors for help finding a home and negotiating price rather than mkt knowledge
3
About half of all realtors prefer to sell existing homes
4
Nearly two-‐thirds of realtors believe that builders are not offering useful training about how to sell new homes
5
As expected, realtors recognize that new homes outperform existing homes on energy efficiency, customization, etc.
•
•
19
Beyond MLS, realtors learn about new homes through builder announcements and from other agents/brokers
Those that are not likely to recommend new homes to prospective buyers cite difficulties with pricing and convincing buyers of the value
Similar to prospective buyers, realtors have varying opinions about whether new homes offer higher quality construction than existing homes
90%
of homes sold are “Used”
But 18% of Home Shoppers Preferred New
of shoppers are considering both New and Used
of  shoppers  who
initially prefer New,
ultimately buy Used
Longer Buying Cycle
Resulting Marketing Gap & Opportunityâ&#x20AC;Ś
The Majority of the Realtors and Home Shoppers think that used homes are more affordable
Know your Competition
agents are crucial
85% of recent home buyers worked with an agent
91%
of those preferring new yet bought used worked with an agent
Boomers Are an “Easy-er” Sell Have a home ownership rate of 76%, 21% higher than the US overall home ownership rate 86% of Home Owning Boomers live in Single Family Detached homes Are 13% more likely to prefer new homes over existing homes (and 14% less likely to prefer existing over new) Boomers have higher incomes, better credit, more wealth…
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Top triggers: • Favorable home prices • Favorable interest rates • Considering retirement • Tired of current house • Relocated to new city • Desire to live closer to family/friends
February Source: Metrostudy Analysis; BDX 2012 and 2013 Homebuyer Insights Study, Hanley Wood, Chadwick Martin Bailey
6,
Especially Compared to Boomers, Gen Y Is a Harder Sell, But They Are Looking Have an estimated ownership rate of only 44% Most impacted by tougher credit and down payment standards Are 14% less likely to prefer new homes over existing homes (and 5% more likely to prefer existing over new) Top triggers: • Favorable home prices • Favorable interest rates • Planning to increase to family size • Increase in income • Getting married/moving in with partner • Increasing rent
28
Source: Metrostudy Analysis; BDX 2012 and 2013 Homebuyer Insights Study, Hanley Wood, Chadwick Martin Bailey February
6,
Realtors’ Focus on What’s Most Important Does Not Align with Buyers Or What Helps Sell New Homes Most Important Home Features for Driving Recommendations to Clients
100
A
O
S
H
J L
75
T
P
Importance*
50
Average
K
Q
E
D
F
M
C
U
V
N
R
B
25
Overall Importance 0
Attribute *Derived Importance: The scores are shown as relative importances using TreeNet Analysis
29
G
I
A Lower cost per square foot/More space for the money B Lower maintenance costs (money and time spent) C More living space D Less living space E Proximity to good schools F Convenient to shopping/ entertainment/activities G Safer neighborhood H Character/Uniqueness of home I Convenient to work J Convenient to friends/family K Larger yard or lot/More space between houses L Established neighborhood M Ability to customize house to best suit you and your family N Community amenities (pool, park, golf course, etc.) O Quality of construction P Architecture/Overall design (appearance of house) Q Better floor plans for me and my family R Energy efficiency S Sense of community within neighborhood T Mature trees & landscaping U Prestige/Exclusivity V Storage space
Base: All (3,044) ● Q19: For each attribute below please indicate the extent to which you believe existing and new homes offered by builders differ? Use your mouse to slide the marker towards your answer. ● Q15: When working with a client to purchase a home, how likely are you to recommend they purchase….
Changing Market Conditions Have Spurred More Traffic and a Higher Percentage of First Time Buyers % 1st Time Homebuyers
Educa8on
60%
60%
38
27
40%
40%
20%
Prospects Wave 1
58
34
29
26
29
0%
Prospects Wave 2
<Bachelors
Bachelors
Graduate or Pro. Degree
Age
Income
60%
49
40%
30
40%
27
20%
22
15
0%
$50-‐$100k
$100-‐$150k
Prospect Wave 1
30
42
20%
0%
60%
40
$150k+
20%
29
33
20
23 25
11
18
11
18 10
0%
25-‐29
30-‐39
Prospect Wave 2
Source: BDX 2012 and 2013 Homebuyer Insights Study, Hanley Wood, Chadwick Martin Bailey
40-‐49
50-‐59
60+
More Renters Are Shopping
Foreclosures ??
Current (Prospect) Primary Residence
100% 75%
5
78
50% 25%
Prospect Wave 1
Prospect Wave 2 Own Rent
61
57
39
43
Prospect Wave 1
Prospect Wave 2
83
52
39
0%
31
3
48
61
Type of Home
Type of Construc8on
Ownership
17
14
Prospect Wave 1
Prospect Wave 2
Custom built on own lot ExisXng Home Brand new home offered by builder
Source: BDX 2012 and 2013 Homebuyer Insights Study, Hanley Wood, Chadwick Martin Bailey
Single Family Detatached Other
Once Again, Life Drives Home Buying
32
Source: BDX 2012 and 2013 Homebuyer Insights Study, Hanley Wood, Chadwick Martin Bailey
Realtors Remain a Critical Partner in the Buying Process
Reasons for Using a Realtor
Intend to Use Realtor Don't Know
No
Prospect Wave 1
Yes
100%
Prospect Wave 2 70
Help negotiate terms/price
66
Coordinate viewings/appointments
75%
73 68 72 65 71 63 67 61 67 63 67 61 65
Find homes with your specifications
84
Draft offers and contracts
85
Assistance navigating you through the purchase process
50%
Have more up to date information on available properties Knowledge of market conditions
25%
4 12
3 12
Prospect Wave 1
Prospect Wave 2
Determine what comparable homes sell for References for inspectors, contractors, lawyers, etc.
0%
33
Knowledge about the neighborhood
Source: BDX 2012 and 2013 Homebuyer Insights Study, Hanley Wood, Chadwick Martin Bailey
0%
75
53
58 51 53 25% 50% % of respondents
75%
Top Criteria Remain Largely Unchanged: Quality Reigns Supreme
12.00
Mean importance
10.00
Quality of construction Safer neighborhood
8.00
6.00
Average
Top 10 Most Important Considerations for Home Purchase
Better floor plans
Lower maintenance costs Energy efficiency More Lower cost living space per sq. footArchitecture/Larger yard Overall design or lot Convenient to work
4.00
Wave 1 New Segment Wave 1 Indifferent Segment 2.00
Wave 2 New Segment Wave 2 Indifferent Segment
0.00
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Source: BDX 2012 and 2013 Homebuyer Insights Study, Hanley Wood, Chadwick Martin Bailey
New Homes Have Improved/Maintained Performance in Many Areas But Lost Ground on Quality Attribute Performance (sorted from high to low based on gap between new minus existing) New is Better
Existing is Better
Prospect Wave 1 Prospect Wave 2
100%
75%
50%
2 2 5 7 7 6 6 6 9 8 10 11 12 11 14 13 18 20 11 13 25 29 25%
77 80
Energy efficiency 63 61 58 58
Ability to customize house Lower maintenance costs 47 49
Beger floor plans for me and my family
34 41 35 38 36 39
Community ameniXes More living space Storage space 23
PresXge/Exclusivity
31 31 33
Architecture/Overall design 20 21
Safer neighborhood
31 30
Quality of ConstrucXon 0%
0%
25%
50%
75%
100%
Note: Movement of approximately 4 pp is considered meaningful
Items rated on an 11pt slider scale with anchored ends. Data shown excludes middle 3 points. Items sorted by gap score (new-existing). Existing is Far Better (4pts)
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No Difference (Middle 3pts)
Source: BDX 2012 and 2013 Homebuyer Insights Study, Hanley Wood, Chadwick Martin Bailey
New is Far Better (4pts)
Buyers Use Essentially the Same Factors to Determine Quality of New and Existing Homes How do we combat this? Importance of Criteria for Determining Quality (among shoppers who will or did consider each type of home) Existing Quality New Quality 14
Durability 11 12 12 12 11 11
Workmanship/Craftsmanship Structural Materials Fit and finish
11 11 11 11 10 10
9 8
Warranty
9
10 10 9 9 9
11 10
Architectural Design
9 9
Performance specifications Energy ratings
7
7
8 8
6 5 5 5 5 4
Built to specifications Newest technology Good for the environment/green
Prospects
0
5
5
Recent Buyers
0 0
Other Â
36
13 13
16
10
15
20
7 7 6 6 6
0 0 0
5
Source: BDX 2012 and 2013 Homebuyer Insights Study, Hanley Wood, Chadwick Martin Bailey
10
15
20
Segment Summaries
Who are they? (Compared to other segments)
What have they done?
Which features are most important to them? Are new construction homes differentiated* these features? What are perceived barriers to purchasing a new construction home?
Indifferent Segment
Existing Segment
18% of the market
36% of the market
47% of the market
• Slightly more educated • Over index on Entry Level, Renters
• Slightly younger • Most likely to work full time • More likely to be first time purchasers • Expect to spend less • More likely to be planning for an increase in family size • Over index on Feature & Location, AA Entry Level, Renters
• More likely to have visited model homes • Spoken with builders
• Engage in both new and existing behaviors (looking at model homes, looking at home listings online, and driving around looking of homes) • More likely to have watched TV shows about local homes/real estate
• • • • •
• Quality of Construction
• Quality of Construction
• Quality of Construction
• Better Floor Plans
• Better Floor Plans
• Better Floor Plans
• Safer Neighborhoods
• Safer Neighborhoods
• Safer Neighborhoods
• Lower cost per sq. foot • Larger lot • Character/uniqueness
• • • •
• • • • •
Slightly older More likely to be retired Less likely to be first-time purchasers Slightly higher incomes Over index on Elite
• Lower cost per sq. foot • Larger lot • Less living space
*Performance gap (new-existing) score: than existing (<0) 38
New Segment
Much better than existing (20+ higher),
Looked at home listings Visited an existing home Spoken with a realtor Sought pre-approval for a loan Bid on a property
Quality of Construction Lower cost per sq. foot Overall Design Larger lot
On par with or slightly better than existing (0 to 19),
Source: BDX 2012 and 2013 Homebuyer Insights Study, Hanley Wood, Chadwick Martin Bailey
Worse
Builder Toolkit
Builder Toolkit
Available onâ&#x20AC;Ś.
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Insights & Implications
The process is lengthy & emotional… the joy gap is real Life in a NEW home
Excitement “I’m ready for a new adventure!”
Exhilaration “I found the house!”
Tentative Excitement “We did it, but now what?”
Joy
- Joy! - Relax – focus on your “wantto-do” list
JOY Gap Life in an EXISTING home - Joy (guarded) - Stressed – list of “to-do’s” is long
Worried “I hope I make the right choice.” “Who can I trust?”
BEGIN JOURNEY
Nervous “Can I afford it?” “Did I buy a lemon?”
Cautious “Will the build process go okay?” (new) “What will the inspectors find?” (existing)
OFFER ACCEPTED
MOVE-IN DATE
9 out of 10 buyers start their new home search online.
Are your new homes on the HBA Website?
For effective consumer messaging…
…illuminate shortcomings of Used homes
…and emphasize the attributes shoppers value most Designed for Living
Low Cost of Ownership
Energy Efficiency
Quality Construction
Start with quality content: image quality
+15% Average
-‐15%
Set Yourself Apart????
Builder Insights Initiative
1,500,000 Â unique monthly shoppers
Interest
Desire
Behavior
Unleash the value and power of BDX Audience
Brand Awareness, Perception & Opinion What is your local brand How do you stack up with awareness, aided & unaided?
regards to value?
How likely would a shopper refer you to a friend?
What can I do to improve my image?
How would you rate each of these builders as far as construc8on quality is concerned?
Realtors Primarily Rely on MLS to Learn about New ProperXes Sources of Informa8on
Mul8ple lis8ng service (MLS) Builder announcements (e.g., e-‐mails, etc.) Other agents/brokers New community/model home visits New home open houses hosted by builders Local real estate lis8ng websites Local Real Estate/New Home Publica8ons Online search engines (i.e., Google, Yahoo, etc.) Online adver8sement Local newspaper adver8sements Billboards and roadside signage Local newspaper ar8cles Na8onal real estate lis8ng websites Social media (i.e., Facebook, Twiier, etc.) Local magazine/publica8on Television adver8sement Radio adver8sing Other None of these
80 49 45 38 37 29 25 20 18 18 16 16 13 13 7 5 5 8 1 0%
25%
50%
75%
100%
% of respondents Base: All, 3,044 ● Q14: How do you become aware of new homes offered by builders that are available to prospecXve (residenXal) buyers that you work with? Select all that apply.
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Ask Your Home Owners
THANK YOU FOR ATTENDING Tammie Smoot MIRM, MCSP, CAPS, CGP Digital Marke8ng Consultant– Building Industry Specialist Builders Digital Experience 2011 NAHB Professional Women In Building – Woman of the Year 2013 NAHB NSMC Chair The Carolinas 704-‐507-‐4411 Tsmoot@theBDX.com
Builders Digital Experience