Hope Based on Facts
Homebuilder Reed Williams says it’s understandable that people are nervous about the real-estate market and hesitant to buy. After all, given the barrage of headlines about price declines and foreclosures, it seems that jitters are justified.
????Or maybe not.?
????In an effort to make sense of it all—and to put current market conditions in historical perspective—Williams and other building industry pros decided to look behind the headlines.
????They were hoping, of course, to uncover solid data that backed up the often-repeated contention that it’s actually an ideal time to buy a home. Consumers, Williams believed, had become immune to marketing slogans and needed facts, facts, facts.
????And it wasn’t just consumers who needed guidance. Williams noticed that even his own salespeople had become demoralized by constant “doom and gloom” messages.
????“I always ask people, if you wouldn’t buy a home during a buyer’s market, then when would you buy a home?” says Williams, vice president of sales and marketing for Pulte Homes. “But we needed solid information.”
????So Williams poured over Pulte’s sales stats beginning in 2000, comparing homes the company was selling eight years ago with similar homes on the market today.
????He found that, thanks to favorable interest rates, buyers would make lower monthly payments today than they did in 2000 for a comparable or larger home.?
????So he decided to enlist the help of other area builders—competitors under normal circumstances—and solicited them to provide sales figures from past years as well. They all complied.
????Then, after crunching everyone’s numbers, Williams put together a presentation called “Now is the Time To Buy” that details how today’s housing market compares to the market eight years ago.?
????The approach made sense because in 2000 conditions were considered solid and relatively normal. One problem, Williams found, was that today’s numbers were being compared to those tallied in 2004 and 2005, when a perfect storm of circumstances converged to cause exploding demand and soaring values.
????Compared to a more typical period, the study concluded, the market was in relatively good shape and was, in many ways, more favorable for buyers than it was in 2000—and certainly more favorable than it was in overheated 2004 and 2005.
????Williams and a panel of area builders presented their findings at a sales managers’ meeting of the Tampa Bay Builders Association (TBBA) in March and the response was overwhelming. They followed up in April with a sold-out seminar for sales associates that was standing-room-only.
????“Our biggest competition right now is not other builders but the nay-sayers out there who discourage people from buying homes,” notes Williams. “Buyers are bombarded by negative messages and it’s very discouraging. We’re giving them hope based on facts, not emotion.”
????One of the most surprising facts uncovered by Williams and his associates was that, regardless of the dire headlines, 2007 was the third best year ever for new-home sales in the Tampa Bay area, with 17,528 closings.??
????Williams credits builder incentives and discounts for some of those numbers. But he points out that people are still buying homes in strong numbers.?
????“The number of new construction starts may be down 58 percent, but that’s a reflection of inventory levels and builders planning ahead and acting responsibly,” he says.
Some of the facts unearthed by the consortium include:
????Even accounting for some recent slippage, the median new-home sales locally has increased?23?percent since 2000.?
????There were more new-home closings locally in 2007 than there were in 2000—and 2000 was considered a strong year.?
????The mortgage interest rate in 2000 was 8.27 percent while today’s rate is 6.25 percent—meaning more bang for the buck.
????He compares buying a home to making a long-term investment in the stock market. Both will have ups and downs but both have delivered positive returns over time.
????“Our problems aren’t over and we’re not where we want to be yet, but there’s hope and good news out there,” Williams says. “We’ve got to let people know it.”?
????He adds that the building industry has not done a particularly good job in communicating with buyers.
????“Instead of talking to the press about our positive news, we’ve let them lump us into national trends with cities like Detroit and Cleveland,” Williams notes. “And our market is definitely not Detroit or Cleveland.”
????Williams said new-home salespeople are thrilled to have a positive message to share with buyers. But a bigger challenge is getting the information to the public. Toward that goal, the panel held a media roundtable in June to brief reporters from local news organizations.
????Originally from Tampa, Williams has been with Pulte Homes for 12 years and entered the real-estate business in 1986. He and his wife Rhonda now live in a lakefront home in Odessa where they enjoy boating and tubing with their two teenage children.?
????An avid football fan, Williams has been a high-school football referee for 19 years and is proud to be part of the “Chain Gang” for the Tampa Bay Buccaneers.
????Williams is modest when credited for his efforts in spearheading this campaign.?
????“This isn’t about me or about Pulte Homes,” he says. “It’s about helping our industry and giving something positive to the community. We’re all in this together. It began as a grassroots effort and just started to grow. It’s been amazing.”