It doesn’t have to be. Get ready now to win the (coming) competition with resale.
Last month the National Association of Realtors (NAR) reported a 27% reduction in resale inventory nationwide. At the same time, we’ve seen a 19% increase in new home sales.
This market is clearly demonstrating that less competition from resale homes directly increases new home sales.
In their 2019 New Construction Housing Trends Report Zillow reported that 64% of home shoppers were open to buying new construction when they started looking for a home but only 9% did.
So, what is it that causes home shoppers to abandon new and buy a resale home? And most importantly, how do we fix it?
In order to understand what is driving home shoppers out of the new home market, we conducted an online shop acting as a shopper looking at both new and resale homes, read everything we could find on the customer journey and expectations, and interviewed both recent new home buyers and buyers who wanted to buy a new home but ended up choosing a resale home instead.
Why Home Shoppers Don’t Buy New
Through that research, several trends emerged that we believe are contributing to home shoppers leaving the new home market and purchasing a resale home instead.
- Overall, home shoppers find the new build process confusing and a “hassle”.
- They can’t figure out what a new home will cost or find it too time-consuming to do so.
- And, they can’t figure out what gets added to the base price to get to the final purchase price.
A New Marketplace Needs New Tools
Especially post-COVID, builders are generally doing a good job of providing tools for home shoppers to “visualize” their homes online without being physically present in a model. But for all intents and purposes the industry’s “tried and true” processes have been translated to a new digital reality versus looking at new and altered processes designed to meet the demands of the current marketplace.
Today shoppers are looking for quicker ways to rule products into or out of their online search. They expect sellers to give them the all of the technology, information and tools they need to “help themselves” (along with the option of a completely self-service experience) right up front.
In the case of home shopping, technology has created an environment where customers have the ability to quickly compare resale homes (like on Zillow). But the home building industry has yet to give the customer the ability to easily compare new build homes with resale apples-to-apples.
Consider that right now the only way for a shopper to compare a new build home to another home is by making contact with a salesperson, either in person or virtually, to learn what the “base price” includes, what options are available and how much they can expect to spend to get exactly what they want.
This truth is actually really surprising when you think about your own purchase behavior. When was the last time you had to pick up the phone or get in your car to get pricing for a product you were considering purchasing? And if that amount of work was the requirement for one product but not another, is it likely that you would have skipped the more difficult product altogether?
Shoppers Want New. Make it Easy to Buy.
We truly believe that most homebuyers would prefer to buy a new home. (Who would want someone else’s old carpet?) The key to keeping the sales flowing when resale inventory increases to normal levels is by rethinking and reimagining the processes you are currently using that are difficult or time-consuming for your home shoppers.
Instead of requiring your customers to interact with sales staff in order to rule your homes “in” to their search, we suggest builders:
- Simplify the new construction process by making clear what options are available and the components that are added to the base price to get to the final price.
- Provide price transparency early on in the search process allowing shoppers to easily compare new with resale.
- Give the customer a fun, time-saving and interactive experience online, BEFORE personally engaging with them.
- Shift the role of sales staff from “selling” customers to becoming the concierge of (or guide to) the new home purchase experience.
A Tool to Bridge the Gap
We designed PRICE BLD-R, a patent-pending subscription-based platform for home builders to accomplish all of these things.
PRICE BLD-R allows shoppers to virtually “build” any home plan with an estimated price and monthly payment that updates in real-time as the user selects the home plan, floorplan options, elevation, homesite, finish level and landscaping.
PRICE BLD-R makes the components that go into a new build simple and gives a “high level” view allowing shoppers to quickly self-qualify and move-forward without getting “lost in the weeds” of too many choices.
The system is simple to integrate with a URL link (no need for website updates) and is super mobile-friendly. And, all of the content and categories in the system are easily customizable by the builder. The system works for a wide-variety of products and is currently being used for high-end semi-custom homes, single-family homes, and multi-family homes.
Although it may seem like the lines of prospects ready to buy your homes might last forever, unfortunately they probably won’t. Now is the time to get PRICE BLD-R in place and working for you.
Then schedule a demo. We’ll walk you through how the system can be customized to your unique product offering.