April 2, 2008


Builders Report Increase In Traffic And Sales In Recent Weeks
The home building industry as a whole may be months away from recovery from its most serious downturn in recent history, but in recent weeks, many builders are experiencing an emotion they haven't felt in quite some time-optimism. In reports from California to Florida, builders say they are seeing increases in both traffic and sales. Buyers have been drawn by such factors as market-driven pricing and improving accessibility to financing, builders say.

Some of the increase is from builders deeply discounting their standing inventory to generate cash flow. In Southern California, D.R. Horton's recent "UnAuction" promotion, which offered pricing up to 50 percent off on standing inventory in select communities, generated more than 200 sales-and the return of the camp-out-in two weekends in February, according to reports from the ad agency that handled the campaign. The event has since been rolled out to other markets.

Likewise, Pulte Homes picked up traffic and sales from "Leap 4 Joy," a nationwide, four-day event tied to the leap year that offered significant discounts, incentives, and special financing. In the Sacramento, Calif., market alone, Hanley Wood Market Intelligence, our sister division, reported 55 to 60 net sales from the event.

Several builders in the Denver and Colorado Springs markets have reported an upswing in traffic and sales. Shea Homes currently leads the Denver market in customer traffic, with more than 2,000 visitors over the past three weeks, says Cory Hunsader, regional manager for Hanley Wood Market Intelligence, who reports on traffic and sales in the Denver market.

Cheryl Haflich, director of sales and marketing for Shea Homes Denver, attributes much of the company's increased activity to the opening of BackCountry, a gated community with homes from $500,000 to $750,000 in the Highlands Ranch master planned community that opened last September and has generated more than 100 sales.

Increased traffic and sales also have been reported in some communities in Tucson, Ariz., Reno, Nev., greater Atlanta, St. Louis, and Baltimore. Plus, Myers Barnes, a nationally known sales educator who works with builders in several markets, says his clients are seeing the same thing. "Raleigh, [N.C.], is seeing traffic; sales are competitive and stable," he told BUILDER. "Midwest sales continue to be good, and the state of Oklahoma is overall selling. I'm not willing to say things are cheery. I am willing to say things are good for those with good market practices."

There's particularly good news from both coasts in Florida, which has been heavily battered in the past year.

Melbourne-based Holiday Builders has seen a 20 percent average increase in traffic and a 22 percent increase in sales across its communities in Florida and Dallas, CEO Kim Shelpman says. "It appears that we have hit the bottom, and a rebound is imminent by the end of the year," she says. She attributes the increase to a combination of improved buyer sentiment, lower interest rates and improved lending criteria, adjusting pricing to the current market, marketing efforts, and a revamped sales process.

In Manatee County, Fla., near Sarasota, Neal Communities rolled out an entry-level cottage-style CafŽ Collection, starting in the $120,000s, on Feb. 23 and sold 25 homes in 21 days. Further down the coast, in the hurting Naples and Ft. Myers area, Stock Development has already outpaced its 2007 sales volume by a good 10 percent-and the first quarter isn't even finished yet, says Claudine Wetzel, vice president of sales and marketing for the Naples-based company. Stock Development has communities in Naples, Estero, Ft. Myers, and Punta Gorda.

"Customers realize it's just a good time to buy," Wetzel says. "There's a pent-up demand."

And the best news, she says, is the sales should continue through the spring. "A lot of people in this market come in January and February and buy in April and May," she explains. "We're very excited."

Daytona Beach, Fla.-based ICI Homes sold twice as many homes in January and February as it did in the same period a year ago, and traffic is up 20 percent, says Rosemary Messina, vice president of sales and marketing for ICI. She credits the increase to a host of factors, including company-wide training to provide back up to the salesforce, a 20 percent price cut on all standing inventory, a VIP incentive program for top-producing Realtors, and a presale program for EFACTOR, its green building program that includes paying buyers' electric bills for two years.

Of all the steps the company took, Messina gives the most credit to its "Sales 101" training, a two-day crash course she implemented after personnel cuts last fall left her with a bare-bones staff.

"When last round of cuts came around in November, I woke up in the middle of the night and said, 'I can't terminate anyone, we're down to marrow. We need to hire people for the models; we're going to train everyone in the company,'" Messina says. "We've trained 55 non-salespeople to be salespeople."

Not only has it given her sales staff much-needed support, it has given the rest of the staff a new perspective about how tough a job sales really is.

"In this climate, it taught us empathy beyond belief," she says, "about what the sales department has to go through to get a sale."

Source: Builder Online, March 20, 2008

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