Homebuilders and those who market new homes are trying to keep up with a housing market that has spiked and morphed quickly in 2020. As people continue to move from urban centers to the suburbs and beyond, homebuilder budgets have shifted.
Once the orders were given to stay home, many people’s thoughts turned to where they live. Did they want to be stuck in a highly populated area in small spaces while trying to quarantine, or did they want to flee and find some open space?
In the US, there has been a run for the hills, or the valleys, or the coast. Bucolic countryscapes and sleepy towns suddenly found people from urban areas scampering to find their pandemic retreat, be it temporary or permanent.
That has meant that both new and existing homes all over the US are at a premium. CNBC noted that sales of new homes jumped in August to the highest level in 14 years, yet the supply dropped to just 3.3 months’ worth of homes. Having an inventory of six months-worth of homes is considered balanced. And the numbers keep rising. US single-family home sales were up 32.1% in September, per the US Census Bureau and Department of Housing and Urban Development. That means there aren’t enough homes being built to keep up with demand, and because rates for building supplies are up, some are keeping production slow to keep costs down.
How to market new homes in this new economy
Considering they now have fewer homes to sell while trying to keep up with demand, many homebuilders decided to slow their media buys and pull back some dollars, especially to have time to rebuild supply, says Phil Case, chief client officer at Max Connect Marketing. Based in Utah, he has several clients in the homebuilding industry and has seen first-hand the changes in consumer behavior.
Early on during the pandemic, the company analysed data and trending information and saw that screen time was up, indicating that people had a desire to move. So, it worked with its clients to engage potential buyers with virtual tours and additional digital research tools.
In the case of Visionary Homes, high demand allowed the builder to spend less in media and advertising. Instead, it is focusing that spend on content production, technology improvements and improving the customer journey and experience, while taking breathers from events, and other time-intensive activities, says Jonathan Williams, vice-president, marketing at Visionary Homes. The company plans on creating more digital content so that people can be more informed, do more research and make more selections online to provide a “concierge level of service.”
Landsea Homes also plans to invest more in technology, increasing and placing great emphasis on our virtual experiences and incorporating video for homebuyers, says Michelle Byrge, vice-president Corporate Marketing, Landsea Homes. Its online marketing program uses a variety of virtual assets, including interactive community maps, 3D technology, videos, virtual tours, interactive area maps and interactive floor plans and it plans to promote visual assets on social media and grassroots efforts.
Where home sales are headed in 2021
What will 2021 hold? It depends on interest rates, per Case. “If home prices go up because of demand, and then interest rates go up, homes simply become unaffordable and people have to settle for less or they choose another housing option.” The cost of building homes – including rising lumber prices – will be another factor, he says.
In the meantime, Visionary hopes to meet the growing demands of potential homebuyers. It is planning more personalized digital content and awareness generation. “We spend less on ads, but we take that [budget] and are building assets and resources to make our customer experience better… to improve our messaging, and to invest and improve our technology for our homebuyers,” says Williams.
Landsea aims to go into the new year with a robust marketing plan, says Byrge. “We expect strong sales to continue for Landsea Homes across all markets well into 2021. At the end of the day, a home is still a very valuable commodity, especially in light of these unprecedented times. With the big pivot to working at home, we are seeing demand from homebuyers for that extra space that they can use for work, as fitness hubs or for distance learning schooling.”