Builder Using Demographics As a Guide
By Gina Dostler
I think we are in the upswing and coming out of our economic woes. Not because the money situation has stabilized and our Beaver Cleaver world of yore has returned. But because people are resilient creative beings taking up the challenge presented to them in these difficult times.
Businesses are forced to think out of the box, to glance over the rim into the unknown, backs against the wall, searching for a way through and around this economic mess. Everyone is forced to change tactics, to adapt or be swept aside.
The economic tides we are swimming through right now have been pretty choppy in the real estate market, with many tossed overboard from a sinking ship. But when I spoke with David Barisic, Vice President Sales and Marketing of Brandywine Homes, I was listening to someone with a positive outlook and strong solutions regarding new home marketing. I learned streamlining demographic profiles in the housing industry is one very important tool to utilize.
Q: These days, businesses need a targeted approach to marketing. Is demographics the best tool?
A: Targeting demographics is an extremely important tool, especially in new home marketing. It provides statistics on the buying patterns of people who live or would like to live in a certain area. With urban infill development, we tend to build in older, more established areas. So the information we gather upfront from the existing neighborhood and surrounding area allows us to make skilled decisions whether it is to our benefit to build in that particular market and if so, what type of housing to design.
Q: In what ways do demographics provide market strategies?
A: By understanding the nature of the market in a particular neighborhood, we know the property’s potential target audience and can build the right home for that demographic. By utilizing this marketing tool, we also learn what surrounds the property, is there a local market nearby, how many schools, types of restaurants, age group and the culture of the neighborhood. It’s not unusual to find demographic shifts from one neighborhood to another. All these are great qualifiers that enable us to locate the population we need to target.
Q: Is there any specific information gathered from the demographics that is best for new home marketing?
A: There are several key factors to examine. Who are the people living in the area and what are their characteristics? We collect information from various sources that describe the age, income and education level, interests, population, cultural backgrounds, etc. When we know what the existing neighborhood holds, we receive a clearer picture of what we should build. Definite design elements are structured to different populations. For example, certain cultures are extremely family oriented and therefore we would design larger family rooms, game rooms and include spare bedrooms with full baths to accommodate frequently visiting relatives.
Q: You mentioned age? How does that focus on new homes?
A: Age range is a definite driver. If we find the projected profile is older and might be retiring soon, we shy away from 2-3 stories and focus on single-level detached homes with no stairs associated with it. We know younger families tend to purchase homes that include family rooms, extra bathrooms, large kitchens and that are situated near schools and parks.
Q: How important are schools and other structures in your research?
A: One outstanding indicator is the local schools and their credentials. Schools well-known for educational excellence attract buyers whether they have children or due to the resale value the schools can bring.
Q: What other uses do demographics provide?
A: Stepping away from home building strategies, demographic information is also utilized for advertising purposes. Consider age range. If we have a market that holds a younger crowd in their 20’s, we utilize social media marketing such as Twitter and Facebook. For an older demographic, we might use the more traditional method of print media.
Q: What are reliable sources for gathering statistics?
A: It depends where we are looking. Census data gives a snapshot of time and is a great way to improve efficiency and to better understand our particular market. Certain school district’s websites supply information on local population. It also allows a window to see how certain schools are performing and the importance education plays in that district. Also, just driving through the neighborhood and looking at schools to see firsthand the parents picking up their kids tells a lot about who lives in the neighborhood. We also check out the surrounding areas, view the signs on the stores, what kind of cars are on the roads, etc. This data shows the true nature of the neighborhood. Also, our more than 15 years of home building in Orange County has allowed us to collect a lot of our own data that we use for marketing purposes.
Q: What are the first steps you take to verify a piece of property?
A: First thing we do is to review the housing values around the location. More importantly, we also review the values over the past couple of years, what were the prices of the houses six months ago versus today and the percentage of foreclosures and short sales. An abundance of short sales tells us it will be harder to justify the prices of new homes. So we make sure to gather the general housing market conditions first. Then we look at the schools. Once again, the majority of new home buyers whether they have kids or not, look to the school system for resale value on the homes. This is an important component of the analysis and can be a deal breaker by itself. If a piece of property is located in a substandard school district, getting a decent price for the homes can prove difficult.
Q: How does the actual property come into play?
A: After sifting through the demographics in the area, we take a look at the actual site. How many houses can we fit? What configuration should we design the houses? We collaborate with architects and land planners alongside our in-house staff to come up with a plan for the property. Along with the demographic research, we want to be certain the product type compliments the surrounding neighborhood. For example, if we add to an existing neighborhood that consists of post-world war II housing, we don’t want to build multi-level condo units that would change the nature of the area.
Vice President Sales and Marketing
16580 Aston Street
Irvine, Ca 92606