For most, having the ability to go back in time would be a dream. For real Estate however, it’s a nightmare. As of January, 2009 (see chart 1) we are now officially back to 2004 home prices. Any gains made during the housing bubble were given back in the last two years. Areas defined as the Sun Belt – Arizona, California, Florida and Nevada – that had the largest run-up in prices since 2000 have also been the hardest hit in the downturn. While also in decline, other regions have fared far better on a relative basis. New York and Washington DC, are two metro areas that, while experiencing fairly healthy growth during 2004-2006, have not given back nearly as much as the Sun Belt. Markets such as Boston, Charlotte, Cleveland, Dallas, and Denver that never saw the large double-digit price increases during the same 2004-2006 time period, are not currently experiencing double-digit declines.

“It’s the economy, stupid” and for builders in the SunBelt 2008 was a painful year. Adding insult to injury the SunBelt, the epicenters of the housing bubble, are also the markets whose job markets also saw the largest declines in 2008. According to the Milken Institute who ranks U.S. metropolitan areas by how well they are at creating and sustaining jobs and economic growth. The top five “best performing cities” were- Provo UT, Raleigh NC, Salt Lake UT, Austin-Round TX, and Huntsville AL. On the plus side for the SunBelt Orlando Florida was ranked 11^th. Other best performing Florida metros include: Ocala, Pensacola, Gainesville, and Jacksonville. Panama City and Fort Walton were listed as the top two small metros.

By: Brian Kennedy

WWW.KENNEDY-RESOURCES.COM

Let’s face it, for most homebuilders we are in a real estate depression. With almost 100% of Builders reporting historic lows for sales and traffic, it’s easy to get discouraged. This combined with a plethora of negative news one could easily succumb to a mindset that nothing is selling so why bother. For most builders this mindset is crippling, for others it’s providing an opportunity to grow market share. For these builders its like surviving in shark infested waters, survival simply means swimming faster than the others. Excellent examples of this positive approach is The Villages Located in central Florida and Southern Crafted Homes located in Tampa Florida.

The Villages despite an almost 50% reduction in sales velocity from its peak is currently selling approximately 250 to 300 hundred units a month with the majority of sales coming from new homes sales. Having conducted extensive market studies and Mystery shopping for the Villages, I have never been more impressed with an organization. The Village’s team is all about positioning and feedback. They are keenly aware of everything that is selling in their market and position accordingly. Unlike the competition, they avoid reacting to the market by deep discounting in order to purge inventory. Instead they concentrate on a better sales presentation that communicates the value of intangibles that transcend pure price.

Southern Crafted homes based in Land O’ Lakes, Florida despite being a market that is down 28% from last year is the number one fastest growing private homebuilders in Florida, as ranked by Inc. Magazine. How do they do it? Like The Villages, they too position ahead of the market. They also concentrate on exceptional sales presentations. They are also extremely progressive in driving traffic to their sales centers with creative low cost web marketing.

WWW.KENNEDY-RESOURCES.COM

”Out From the ashes of disaster grow the roses of success!”— Katrina home

Nov 11

Written by: bkennedy
11/17/2008 2:18 PM

From the ashes of disaster grow the roses of success

As I’ve been discussing over the last couple of months, some builders have responded to the housing crises with some pretty creative ideas.

Out of the 2005 Hurricane Katrina disaster came “The Katrina Cottage” — a small, sturdy, single-family house that is expandable and can be built in a few weeks. For many home buyers, these specifications fit like a glove.

The first of these bare-bone homes was designed by New York architect Marianne Cusato, who was looking to develop housing for people left homeless by Katrina.

Then, last year, Cusato partnered with home improvement retailer Lowe’s  to sell designs for the cottages at the home improvement retailer’s U.S. Gulf stores.

The original Katrina Cottage (Katrina Cottage I) is a small, sturdy, dignified house that can be delivered at the cost of a FEMA trailer. It arose as a solution for post-disaster housing during the Mississippi Renewal Forum, which took place in Biloxi, Mississippi in October 2006, six weeks after Hurricane Katrina. Among the hundred and seventy participants, there were a dozen architects present who designed a series of small houses, making the plans available to the people of Mississippi.

Several months later, when a substantial number of the FEMA trailers had been installed, it became apparent that the cost was exceeding $70,000 per unit and that these trailers were quasi-permanent. The Katrina Cottage Committee was formed to provide design that would make better use of this funding for the current housing needs after Hurricane Katrina and for future disasters.

The State of Mississippi, through the Governor’s Office for Recovery & Renewal, took the initiative to apply for a substantial grant for this purpose. This became a reality with a recently approved pilot program for all five Gulf states, which allocates $400 million dollars for the pursuit of designs and technology for future hurricanes. In addition to this program, President Bush recently signed the Baker Bill, which will allow FEMA to provide permanent structures after future disasters.

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As I’ve been discussing over the last couple of months, some builders are responded to the housing crises with some pretty creative ideas.

Out of the 2005 Hurricane Katrina disaster came “The Katrina Cottage” — a small, sturdy, single-family house that is expandable and can be built in a few weeks. For many home buyers, these specifications fit like a glove.

The first of these bare-bone homes was designed by New York architect Marianne Cusato, who was looking to develop housing for people left homeless by Katrina.

Then, last year, Cusato partnered with home improvement retailer Lowe’s to sell designs for the cottages at the home improvement retailer’s U.S. Gulf stores.

The original Katrina Cottage (Katrina Cottage I) is a small, sturdy, dignified house that can be delivered at the cost of a FEMA trailer. It arose as a solution for post-disaster housing during the Mississippi Renewal Forum, which took place in Biloxi, Mississippi in October 2006, six weeks after Hurricane Katrina. Among the hundred and seventy participants, there were a dozen architects present who designed a series of small houses, making the plans available to the people of Mississippi.

Several months later, when a substantial number of the FEMA trailers had been installed, it became apparent that the cost was exceeding $70,000 per unit and that these trailers were quasi-permanent. The Katrina Cottage Committee was formed to provide design that would make better use of this funding for the current housing needs after Hurricane Katrina and for future disasters.

The State of Mississippi, through the Governor’s Office for Recovery & Renewal, took the initiative to apply for a substantial grant for this purpose. This became a reality with a recently approved pilot program for all five Gulf states, which allocates $400 million dollars for the pursuit of designs and technology for future hurricanes. In addition to this program, President Bush recently signed the Baker Bill, which will allow FEMA to provide permanent structures after future disasters.

www.kennedy-resources.com

As I’ve been discussing over the past couple of weeks, some builders are responded to the housing crises with some pretty creative ideas. One builder has literally been thinking out of the box by converting shipping containers to single and multifamily homes.

The company PFNC founded by Brian McCarthy, is a for profit business dedicated to raising the standard of living for families who currently reside in dangerous or substandard conditions.  PFNC stands for “Por Fin Nuestra Casa.” Translated in English this simply means “Finally, a home of our own.” These words are the foundation of PFNC, whose goal is to provide housing to those who most desperately need it around the globe. You can visit their website at >>>http://www.pfnc.net/index.htm

PFNC utilizes surplus shipping containers resulting from the United States’ consistent trade deficit.  These containers serve as the building block of PFNC housing, but go through an extensive conversion process to make them a home.  PFNC offers an affordable housing solution that is scalable and fully portable. Each PFNC unit includes 1st world amenities for a price of less than $10,000 (US)*

PFNC, has made a prototype out of a standard shipping container that hauls goods worldwide — a 320-square-foot home with a kitchen, bath with toilet, sleeping areas, windows and a bright blue door. 

The house may be sparse by U.S. standards, but Nava said it’s a huge improvement in safety, security and health over where many now live.

When drawings and color pictures of the prototype were shown around a poor Juarez neighborhood, people said, “You know, it’d be like a dream to live in one of these,” Nava said. “You know, just the thought of having nice fresh air ventilating through the house, a large bed … a normal kitchen and a safe home that locks and closes each night was more than appealing.”

www.kennedy-resources.com

Enough with the bad news, let’s look to the good and move forward!!  For those who know me, I can almost hear them say “hypocrite”. Several years when things were good, I was trying desperately for people to see the dark cloud approaching. Trust me, I was definitely a cyclical person (just ask my wife). Today, I again find myself in the minority. This time however, I see good things. No, I don’t see the market growing much in the next five years. And no I don’t see dead people like in the Movie the Sixth Sense.  Between interest rates going up, lending standards tightening up, foreclosures continuing to increase, and a weakening job market, growth is definitely several years, perhaps even a decade, out. Then why so positive?  Well, I see an opportunity for new fundamental strategies in home building to emerge. Things unheard of a few years ago could become the success stories of tomorrow. Things like multigenerational homes and catalog homes are just a few concepts that could find success serving these new markets. 

Just last week when doing work for a builder client at the Villages, I saw for the first time one of original Sears catalog homes. Very impressive!  What was most interesting is that despite common misconception, customers could design their own homes and submit the blueprints to Sears, which would then ship off the appropriate precut and fitted materials, putting the home owner in full creative control. Customers had the freedom to build their own dream houses, and Sears helped realize these dreams through quality custom design and favorable financing. Today, a hundred years later with the benefits of computerization, success like this can once again emerge. 

In the coming months I plan to explore and deliver you the best practices that are currently reshaping the Real Estate Industry. Stay tuned!

www.Kennedy-Resources.com

As I’ve been discussing over the past couple of weeks, Top producers those 20% of sales agents that account for 80% of new home sales have similar skills that help them survive and even flourish in the most difficult markets. The most exciting part of this research is that these skills can be learned and perfected by anyone with right attitude.

· Leave no Customer behind. Top producers know the importance of follow-up. Experience tells them that if the customer leaves without setting up the follow-up odds are against them. Trust me nothing is more awkward than cold calling a customer with a lame excuse. If you don’t know what is of value to the customer for follow-up you simply did a poor job of discovery. Unfortunately today the follow-up has become even more impersonal. All too many sales people now make the mistake sending out impersonal email blast or letters thinking it is proper follow-up.  Given the extended buying cycle these skills are essential. The challenge again is getting “In-Touch” with the prospects needs. If, for example, the prospect tells you her kids would have to change schools, follow-up with “Hello Mrs. Johnson, it’s me, Brian Kennedy with All American Homes. Just like I promised, I’m calling you for something you might find of interest, I just received a new school package and thought it would be something you might like. I would be happy to stay late to make sure you get it. What day works best for you?”

· Close, close, close. Top producers follow the ABC’s, “Always Be Closing” and are not afraid to close. They know closing requires incredible finesse. Much like fishing, pulling too hard will break the line. By never pulling you are less likely to set the hook. In fact, much of their presentation revolves around small trial closes that set the stage for asking for “the sale”. They are constantly receiving feedback that gets the prospect thinking about the possibility of purchasing their product. 

www.kennedy-resources.com

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 Housing Market Index lower but builders remain optimistic

Although both traffic and customer confidence are at record level lows, the U.S. housing market may strengthen in coming months, an index of sales contracts on previously owned U.S. homes rose 5.3% in June from the prior month, the National Association of Realtors reported Thursday.

NAHB produces the Housing Market Index (HMI), a weighted, seasonally adjusted statistic derived from ratings for present single-family sales, single-family sales in the next six months and buyers traffic. The first two components are measured on a scale of “good” “fair,” and “poor,” and the last one is measured on a scale of “high,” “average,” and “low.”

A rating of 50 indicates that the number of positive or good responses received from the builders is about the same as the number of negative or poor responses. Ratings higher than 50 indicate more positive or good responses.

Source: NAHB, Builders’ Economic Council (BEC) Monthly Surveys

www.kennedybuilderresources.com

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As I’ve been discussing over the past couple of weeks, Top producers (those 20% of sales agents that account for 80% of new home sales) have similar skills that help them survive and even flourish in the most difficult markets. The most exciting part of this research is that these skills can be learned and perfected by anyone with the right attitude.

·         Masters of Persuasion. The key to persuasion is motivation. Top producers listen extremely well and are constantly discovering what motivates prospects so they can provide for that motivation with “one of a kind” solutions.  Top producers often discuss the benefits of features to better communicate compelling value. Top producers are also keenly aware that people have two major motivations: the desire to achieve and the fear of loss. The desire to achieve motivates people to want more. The fear of loss, often stronger than the desire to achieve, is also a motivator to act. Top producers, when possible, work both motivators simultaneously to make the sale.

·         Infectious attitude and compelling confidence. Buyers today are scared and apprehensive, making it all the more imperative that the sale person possesses an extremely upbeat attitude. In bad markets it’s easy to succumb to a negative atmosphere and unconsciously project that onto prospects. Top Producers know that when a prospect walks through the door that they are on stage.  “Its Lights camera action” time and they are ready to impress. Top Producers are also confidant; they know they offer the best product and a customer who purchase’s is truly fortunate. Their excitement and enthusiasm for their product is contagious and essential to providing an environment conducive to sales success.

www.inspectyourexpect.com

Over the years I’ve have been fortunate enough to have extensively researched the characteristics of top producing salespeople (those 20% of sales agents that account for 80% of new home sales). By combining that knowledge with my own practical experiences I have been able determine those practices most valuable for sales success.  What I’ve found is that history does tend to repeat itself. Those characteristics that forged “Top Gun” sales people in the past are for the most part the same today. The key: spending the time to understand the customer’s true wants, needs, desires and the ability to fulfill them. I call this “in-Touch” selling. Although some people are more naturally gifted for sales, all of the following characteristics can be learned and practiced successfully by anyone.

· Experts in their field. Top Producers know it’s not enough to know your product. You also need to know your competitors, especially in down markets. Customers typically don’t pay more for a home than an equally desirable substitute. Unfortunately most customers conceal their true thoughts regarding other homes their considering.  This, combined with sales people egos wrongly eliminating viable substitute‘s worthy of research provides a weak basis of knowledge to sell from. Knowing and researching comparable’s is absolutely critical to navigate customers to your compelling value. The best way to accomplish this is to use the tried and true cost comparison method whereby you assign positive and negative dollar values to your comparable’s. Remember to assign values to intangibles. Things like snob appeal and builder reputation have value and should also be weighed. I have included an oversimplified example below (Table-1).  Also make sure you pay close attention to best practices that you can incorporate into your own presentation.

Sample cost comparason

 WWW.INSPECTYOUREXPECT.COM

 

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