We all know the market for new homes is bad. Okay, horrible is a better word. According to Hanley Wood Market Intelligence, new home sales in the Chicago market continue a sustained downward trend. In August 2008, builders netted only 424 sales in new for-sale subdivisions of ten units or more, down 79% from the 1,975 net sales recorded a year earlier. Although absorption rates have fallen greatly, base prices of units sold remain little changed from a year ago. Average prices have fluctuated in recent months due primarily to shift in sales mix product such as the sale of high end units in and around the Chicago Loop. Future job losses in Chicago will hamper the demand for new construction in the near term.
What to feel even worse? Check out this chart:
Inventory (homes built by not sold) is also at an all-time high, meaning fewer new communities will be introduced in the near future as the market attempts to absorb what is already out there.
So what’s a marketer to do?
First, don’t panic — at least not in front of sales people. I sit on a Board with new home salespeople and I can tell you from firsthand knowledge that the doom and gloom attitude of many of them is not helping anything. In fact, those builders who have the most upbeat salespeople also have the highest sales. The key to keeping sales people up is to bring them leads. Sales people need to be busy. They need to know their time isn’t being wasted. They need to know that their jobs are secure — otherwise they’ll spend time looking for another job instead of selling your homes.
Second, advertise, and then advertise some more. No, I’m not saying you have to spend a fortune just because it helps my company. Rather, you must remember that advertising is an investment and not an expense. As such, advertising must get back for you more than it cost.
To accomplish this, go where the buyers are — online. Research today shows that over 85% of new home shoppers use the web. It makes sense. With a click or two, potential buyers can be at your site and then at your door. But to reach them, you must make your online efforts work cost-effectively. That means “pay per click” advertising where you only pay when someone clicks on your message, versus “impressions” where you pay based on getting your message in front of 100,000 to 1,000,000 eyes.
Then, when someone clicks on your ad, where do you send them? If you just send them to your site, then your online ad isn’t working together with your website. Your ad should have some type of offer or solution to the viewers’ problems that, when clicked on, leads the viewers to a page that further explains your offer and even encourages them to make an online appointment or sign up for more information.
If you just send people to your site, they’ll have to click around to find what you promised in your ad — and that could lead people to just leave, meaning you paid to get someone to your site and then lost them at your site.
Here’s an example of an appointment scheduler we created that has worked out very nicely.
To see this live, visit www.parkplacehomeschicago.com
If you look at the market reports each week, you’ll notice that the big sellers are also the big advertisers. Those who aren’t promoting themselves continue to slide in sales, and will likely have a tough time in 2009 trying to get some momentum going.
Remember, advertising is an investment. You shouldn’t fear it. Rather, you should embrace it and make it work for you.
Good writing. Keep up the good work. I just added your RSS feed my Google News Reader..
Thanks Matt. I’m fed your blog as well since we seem to be writing on the same subjects. I’ll look forward to reading your thoughts in the future.