Goat Meat For Sale: A lesson in creating a successful new home community

Thursday, August 13, 2009

GOAT MEAT FOR SALE: A lesson in creating a successful new home community
A few years ago I inspected a vacant tract of ground in a remote location in the western suburbs of Birmingham, Alabama. Although situated within the city limits of Hoover, an upscale suburb which is considered to contain one of the better school districts in the metropolitan area, this property is and would naturally be perceived as for all intents and purposes physically within Bessemer, a lower income and socio-economic city in the process of decline.The growth in Birmingham had historically followed four major traffic arteries to the south. This property, unfortunately, was not proximate to any of those routes and instead was accessed only from surface roads after what seemed to be a long and arduous journey, remote from other development and services. In fact, when I first went to visit the site I wondered how we would attract prospective purchasers, especially as the most visible landmark along the way and very near to the property was a hand painted sign nailed to a tree that read Goat Meat for Sale.

Now I have come across a number of signs in my life that were puzzling. Last week in a restaurant restroom I noticed a sign next to the soap dispenser that read for washing hands only. I am still uncertain what the management was hoping to avoid by posting that sign, perhaps someone deciding to shampoo their hair? But I had no doubt what the goat meat sign meant and what it suggested about the perception of the neighborhood in which the property was located.
The developers behind the community were two experienced and successful real estate development companies in the area who had commissioned a market study by a national research firm before entering into their joint venture. And prior to finalizing the community plan and just to be certain that they were on the right track, they commissioned a second study to be certain that market conditions had not changed and to consider necessary adjustments to the development strategy prior to starting. I had the pleasure of performing that second study and commented to my client that their action reminded me of the first rule I learned in this business, taught to me by a carpenter during my month-long field indoctrination into the homebuilding process measure twice, cut once.
My report recommendations contained relatively minor changes from the original concept adjusting density and pricing within the parcels, changing the sequence of the development, revising some of the housing product positioning to reduce internal competition, and reducing the size of the Village Center property which required a TND housing component. This last recommendation was due to the local markets less than overly enthusiastic response to the TND concept in several existing developments. These recommendations were all implemented as were my specific suggestions for the community positioning and sales and marketing implementation. While there certainly are a number of successful new home communities across the country that opened in 2005, I believe that Ross Bridge is arguably unique in that its success has continued even through the current economic and housing downturn.
The original absorption estimates for the community had forecast home sales averaging 150 annually. The results achieved have met or exceeded that goal even though the local housing market has seen substantial deterioration. In 2006, the first full year of sales, 194 homes were sold; in 2007, 204 homes were sold; in 2008, 177 homes were sold (and in that year the lower priced home segments within the community were already sold out) and it appears that for 2009 they will sell 130 homes.
On an absolute basis those numbers may seem respectable but from a market share standpoint, they are exceptional. The 2006 absorption equaled a 2.5% share of the total new home production for the metro area, an outstanding accomplishment for a single community. And as the overall market declined by 30% in 2007, an additional 37% in 2008 and a projected additional 60% for 2009, Ross Bridges share of market increased to 3.6% in 2007, 5.7% in 2008 and to an amazing 14.2% in 2009.


What has made Ross Bridge so successful and what lessons can be learned for future residential development?1. They selected a location where their markets wished to live. That may sound simple, almost an absolute, but it was a concept that was often forgotten in the recent boom years.2. They created a true community, not just a subdivision, wherein the individual villages are sized for a reasonable sellout and are separated from each other to preserve values and allow for changes if market conditions require.3. They provided amenities that were appropriate to and desired by the target markets yet did not burden the development or the purchasers with undue cost.4. They selected professional builders and carefully segmented the product and pricing of the homes so that three full pricing quintiles were covered, maximizing the market appeal, while minimizing direct competition within the community.5. They regularly update their market evaluation including analysis of each builders performance and positioning to determine opportunities for their builders to increase sales.6. They required centralized sales and marketing by the developer to insure a cohesive and professional presentation to the market and they provided what I believe is the best sales operation in the market under the direction of my personal choice for one of the best new home sales directors in the business.7. They promote and market the community professionally, recognizing early the paradigm shift to web-based advertising and they spent their advertising dollars intelligently and effectively.
I would recommend taking a look at the community, with a physical visit if possible but, if not, at least a visit on-line http://www.rossbridge.com/
Posted by DanielLevitan at 11:12 AM




Labels: new home marketing, new home sales, new homes, residential development

http://daniellevitan.blogspot.com/2009/08/goat-meat-for-salea-lesson-in-creating.html

The Saga of the Falling Interest Rate

Click here to see how Signature Homes helps Chris and Jessica purchase their dream home...

3.75% Fixed Interest Rate for 30 Years!

Looking for a new home in James Hill? If you are able to move by April 30, 2009, you MUST take advantage of an incredible interest rate buydown through Signature Home Mortgage! For qualified buyers, we are able to buy down your interest rate from around 5% to around 3.75% for 30 years! You must meet mortgage qualifications through Signature Home Mortgage (which include a 720 credit score and 10% down).

For a home with a purchase price of $300,000, this rate buydown equates to a savings of more than $200 every single month!

Please contact Jack and Jodi, our mortgage consultants to see if you qualify for this mortgage program!

The homes in James Hill that will be move-in-ready by April 30th range in price from around $250,000 to around $380,000. Contact one of the sales representatives for a complete list of available homes!

(Contact info for sales and mortgage representatives is found in the column to the right.)

We are looking forward to having you as our new neighbor!

What would you do with $8000?

Please contact the James Hill agents who can e-mail you more info to help "clear up" any confusion you may have about the new tax credit!

Also, re-read last week's post about how the stimulus plan could affect your new home purchase!

To learn more, visit FederalHousingTaxCredit.com.

Tax Credit for First Time Purchasers

Whether you support President Obama's economic stimulus plan or not, if you are a first time homebuyer, there may be something in it for you!

Here are a few bullet points summarizing the new legislation:

• The tax credit is for first-time homebuyers only.
• This is a true credit, and does not have to be repaid to the government.
• The tax credit is equal to 10 percent of the home's purchase price up to a maximum of $8,000.
• The credit is available for homes purchased on or after January 1, 2009 and before December 1, 2009.
• Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit.

If you think you may qualify, click here to see frequently asked questions and answers about the homebuyer tax credit.

You may also find useful info on this link about other provisions in the stimulus plan that relate to the housing market.

I ♥ James Hill

This is why you should ♥ James Hill, too!

♥ Ross Bridge is a community matched by none other in Alabama—friendly home town atmosphere, walking and biking trails, active parks and pools,
budding retail space in the Village Center.

♥ James Hill boasts of diverse home styles that take you back to the days of visiting with your neighbors on your front porch swing, sipping sweet tea.

♥ Affordable homes with a custom feel priced from the 230’s to the 320’s.

♥ James Hill is offering the following incentives if you purchase a home under construction between now and March 15, 2009, close before April 15, 2009, and meet credit approval through Signature Home Mortgage.

• 4.5% interest rate (4.875 APR, or equivalent to .25% rate buydown)
• No closing costs or prepaids
• Up to $1500 toward moving expenses

♥ Please contact the James Hill agents for details.

♥ Whitney Hardy (205) 585-2001

♥ Tarayn Comer (205) 966-2162

Six More Weeks of Winter!

Punxsutawney Phil, the world's most famous groundhog emerged Monday, February 2, 2009 at sunrise at Gobbler's Knob and proclaimed the following "official forecast."

Hear Ye, Hear Ye!

On Gobbler's Knob this glorious Groundhog Day, February 2nd, 2009

Punxsutawney Phil, Seer of Seers, Prognosticator of all Prognosticators

Awoke to the call of President Bill Cooper

And greeted his handlers, Ben Hughes and John Griffiths

After casting a joyful eye towards thousands of his faithful followers,

Phil proclaimed that his beloved Pittsburgh Steelers were World Champions one more time

And a bright sky above me

Showed a shadow beside me.

So 6 more weeks of Winter it will be.

Although the forecast is bleak for the country, the sun is shining brightly on James Hill! Two more families decided to call James Hill home this week end! These two families will be moving into the furnished model home on home site 101 and the Radford home on 102 by the end of February.

Two Grand Neighbors

Congratulations to two lucky families who will soon be moving into their new homes on Grand Avenue! The three families already living on the most prestigous street in Hoover look forward to welcoming their new neighbors. Congratulations to Matthew Calhoun, the sales representative who sold these two homes. He's been working hard for several months to bring more life to Grand Avenue!

2921 Grand Avenue

2960 Grand Avenue