Monday, September 12, 2011

Build It So That They Will Come

The battle to solve the real estate market crisis continues with one of the few interesting ideas I have seen. This story is from the Milwaukee Journal. It’s about a builder who is building homes in the range of just 1,000 square feet, albeit with a garage, which would result in owning a home with cruise ship or dorm room style living. The builder’s idea is to price them at less than $100,000 new.

Granted, the story is a newspaper story and not from a realty association or by anyone directly connected with the real estate industry. Yet, this is (or should be) a positive spin on a solution. I’d like to believe there are plenty of people out there who don’t want or need a lot of space and would welcome the chance to be a home owner within that price range. It might make the difference of a family or individual being able to afford a mortgage instead of renting.

Some of these homes would have multiple bedrooms, supposedly at 6 x 9 which could sleep 2 in each room.

However, this story wraps up with less than positive vibes. It goes on to say that the builder is only building two, which will go in one neighborhood in the Milwaukee area, and how the builder wants to see “if” there would be a positive response. (The opening already took place, and I do not have an indication as to whether or not it was successful.)

Even if the unveiling of these homes was successful, it is yet another instance of the “less than positive” marketing that continues throughout the real estate community. If I were marketing for Miracle homes, I would have been certain to point out that these “are the only the first two homes for this neighborhood”, and how “further expansion plans” are now in the works.

You have to act like you have a winner on your hands. That’s the first rule of promotion of a unique idea that fits a need. This isn’t just to pick on Miracle Homes, as this is the common problem with real estate marketing. Taking the “if anybody buys it, we will come” approach tells the public that you aren’t certain either. In a market where so much is uncertain in real estate.

The “wait and see if” attitude brought out in this story is way too typical, although it’s not the fault of the writer of the story. He was given the information and the interview. Sounds like the builder has been listening to too many realty agents or reading the negative statistics the agents and associations keep putting out there.

My point is that this is another version of the “Homes didn’t sell in this area last year after the tax credit ended, so they didn’t sell well again this year and we don’t know if they will next year” stuff the realty professionals have been dumping on us for a couple of years.

But in this case, it’s a solid idea. Builders across the country should be reading this story and feeling like they could expand upon the theory in most markets around the country and create a buzz. Realty agents should be lined up with potential buyers waiting to tour these smaller homes and asking about pre-ordering for their clients. Renters within 20 miles of these “first” homes should also be lining up to compare with their current apartment or unit and see if they could save money while being able to own. You have to start somewhere.

If you don’t use the opportunity to “build up” a buzz about a new property, there won’t be any reason to build up more new properties. And the market will be stuck the way it is.

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