July 2020 Newsletter

Welcome to the Dog Days of Summer AARC Newsletter.  And, like a dog, this year feels like seven to me…

In these unique times, we are experiencing both understandably conservative spending on Marketing and heightened consumer demand for housing away from the big cities of the northeast and midwest.  Communities investing in Marketing have seen results from their efforts – and while walk-in traffic in sales offices is generally weaker, the folks walking in are seemingly more motivated to buy.

In particular, the pre-retirees who normally start looking for their “dream destination home” after the kids have departed for college are now pulling the trigger faster – and increasingly, they are looking for home office options.  A recent report by the Naples, Florida-based Golf Life Navigators organization stated that more than 2/3 of folks actively looking for destination community real estate have increased their focus on home office options due to COVID-19.  Are you seeing this trend – and if so, what are you doing to Market to it?

In late July, the talented team at KC Creative held a successful webinar for AARC members and invitees on marketing strategies and tactics – many of which are in line with the “understandably conservative spending on Marketing” point from earlier in this note.  If you’d like to get some of the insights from that presentation, please click HERE.

Enjoy your summer, and “woof.”

Bill Houghton
Chair, The AARC

3 Ways Planned Community Builders and Developers Can Take Advantage of Market Disruption for Long-Term Success

Private Communities Registry  | June 23, 2020

From the outset of the pandemic, it was clear that certain companies would have to change the way they do business to stay afloat. More restaurants offering carry-out options, clothing companies manufacturing masks — alternative business models are appearing everywhere in response to the changing landscape.

For homebuilders and developers, there really is no alternate business model — building homes and creating communities is the business. Fortunately, data suggests new home construction hasn’t been hit nearly as hard as other verticals during the past several months. But that doesn’t mean our industry can rest on its laurels and ignore the new reality. On the contrary, this is the ideal time to evolve and adapt to the ever-changing world around us. Here are three ways we recommend you do just that:

Build a More Robust Content Library
Much is unclear about the months ahead. Will we see a second or third wave of the pandemic? How unstable will the economy and/or stock market be? Will unemployment remain high?

A lot of questions have no clear answers, which means demand-generation is more difficult than ever. Those media placements designed to build awareness and pique initial interest (think billboards, broadly targeted banner ads, etc.) rather than spur direct action are probably less effective than usual. It’s not necessarily because people aren’t paying attention; rather, it’s simply more difficult than ever to compel anyone not in the market for a new home to suddenly enter it.

Fortunately, those marketing funds you’ve allocated to those types of media placements don’t have to go to waste. Make the most of this unique situation by flipping some of those dollars into the development of new content, such as storytelling videos, high-quality photography, virtual tours, etc.. Use this content to enhance your website, social media presence and existing digital ads to set yourself apart from the competition. And best of all, you can use these new assets for many months to come, which means this marketing investment can pay dividends well into the future.

Give Potential Customers Something to Aspire To
It’s anybody’s guess as to when life will “go back to normal,” especially with a potential second wave of COVID-19 cases looming. Fortunately, no one is expecting you to have the answer to that.

People who choose to live in a planned community do so because they want more than just a nice home — they want a premium experience that they can’t find in a normal neighborhood. Even if your amenities are closed or more restricted right now due to state or internal policies, you should still focus on your community’s lifestyle.

Connect with your potential customers about the life they still aspire to. Talk about the amenities that will make their life easier or more enjoyable when this is all said and done. If nothing else, aspirational messaging and imagery help people get excited about an experience rather than dwell on the objections they might have in the here and now. You don’t have to oversell which amenities are actually open in your community at this very moment. The dream of a resort-style experience is simply on hold for a bit, not gone forever.

This Could Change Consumer Behavior Forever. Change With It.
We empathize with businesses and individuals wishing things would go back to normal, but the reality is COVID-19 is a catalyst for changing consumer demands. Pre-pandemic market inertia made it possible for builders to focus more on closing deals rather than appeasing consumer demands, but the current environment is completely driven by consumer expectations.

Today, few people will even consider a builder or a community if they can’t shop for a new home safely and on their terms. So it’s paramount to make shopping tools — online and at your community — that allow shoppers to get all the answers to their questions and to take action when they’re ready.

This is as much about learned behavior as it is about safety. Think about how Carvana and, to a lesser extent, Carmax have forever changed the way people feel like they should be able to shop for cars (another major life purchase). Across every industry, expectations for convenient, hassle-free and even contactless shopping are here to stay, and they’ll be even bigger parts of what separate homebuilding market leaders from the laggards going forward.

For homebuilders and developers, that means adopting technologies such as chatbots (we recommend taking a closer look at AtlasRTX) to create a frictionless online experience or self-guided home tours (we’re the team behind the UTourplatform) to allow shoppers to visit and self-tour homes on their schedule. We know it’s not always easy to jump into new digital experiences, especially when business has been done the same way for decades, but it’s important to understand that consumer behavior was moving in this direction well before anyone ever heard of COVID-19, which means this is the perfect opportunity to take the leap forward.

About NDG Communications
NDG Communications is a full-service creative advertising agency based in La Plata, MD, specializing in real estate and new home construction. It empowers builders and developers by telling their authentic story through brand development, traditional advertising, digital and online media, social media, web development, app development, sales center design and more. To learn more about NDG Communications and how it can help you save time and maximize ROI, visit its official website or call (877) 889-1848. For additional insights and recommendations from the NDG team, check out its official blog.

New Home Sales Reach Highest Level Since Great Recession

National Association of Home Builders | July 24, 2020

In a sign that the housing market is leading the economy during the coronavirus outbreak, sales of newly built, single-family homes rose to their highest level since the Great Recession, up 13.8% to a seasonally adjusted annual rate of 776,000 units in June, according to newly released data by the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The June rate is 6.9% higher than the June 2019 pace.

“While Wall Street may have been expecting a smaller gain, anyone following the NAHB/Wells Fargo Housing Market Index would know these numbers are in line with what we are hearing from builders,” said NAHB Chairman Chuck Fowke. “Builders are moving to ramp up production to meet growing demand.”

“Along with rising builder sentiment, we are seeing increasing consumer demand in the suburbs, exurbs and rural areas,” said NAHB Chief Economist Robert Dietz. “At the same time, builders are dealing with supply-side concerns such as rising material costs, particularly lumber, which surpassed its 2018 price peak this week. Nonetheless, low inventory levels point to construction gains ahead.”

A new home sale occurs when a sales contract is signed or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the June reading of 776,000 units is the number of homes that would sell if this pace continued for the next 12 months.

Inventory fell to a 4.7 months’ supply, with 307,000 new single-family homes for sale, 7% lower than June 2019. The current months’ supply is the lowest since 2016. Of the inventory total, just 69,000 are completed, ready to occupy. The median sales price was $329,200. The median price of a new home sale a year earlier was $311,800.

Regionally, on a year-to-date basis new home sales were up in all four regions: 22% in the Northeast, 12.6% in the Midwest, 0.2% in the South, and 3.1% in the West.

NAHB Chief Economist Robert Dietz provides further analysis in this Eye on Housing blog post.

AARC Member and Seal of Approval Community Recognized by Southern Living Magazine

Oxford, Mississippi: Quintessential College Town That Retirees Love, Too

The home of Hotty Toddy is the toast of Southern letters.

Logan Ward , Southern Living | July, 2020

Tucked into the hills of North Mississippi, this town was named after Oxford, England, in hopes of attracting the state university. It worked: The University of Mississippi opened its doors in 1848, and today Oxford is the region’s quintessential college town, celebrated as a literary wellspring and an SEC sports powerhouse.

“Ole Miss is a huge partner for our community,” says Rosie Vassallo, director of retiree attraction with the Oxford-Lafayette County Economic Development Foundation. “The university opens its calendars to welcome all residents. And when you’re surrounded by young people, you feel young yourself.”

The heart of the town is The Square, where the Lafayette County Courthouse—an 1872 Greek Revival-Italianate structure—towers over a funky collection of boutique shops, restaurants, bookstores, and (of course) bars. One of the South’s oldest department stores, Neilson’s—“where trends meet tradition”—has kept its doors open since 1839. When John Currence started City Grocery in 1992, the pioneering chef (who cut his teeth in Chapel Hill!) helped turn the tradition of Southern cooking into a trend that has swept the country. Today, the James Beard Award-winning chef’s “dine-asty,” as he calls it, includes three other Oxford eateries and two catering companies.

This is such a gregarious place. The Oxford Newcomers group, launched 21 years ago to welcome retirees moving to town, recently evolved into Oxford Newcomers and Friends so longtime locals of all ages could join in. “For a small community, we have what a lot of large cities offer in the way of Southern arts and culture,” Vassallo says. “The quality of life here is outstanding. Oxford sells itself.”