New York–A survey of builders and developers located in the Tri-State and Mid-Atlantic regions, as well as Pennsylvania and Florida, found that a majority is still not seeing an improvement in economic conditions.
The recently-released survey found that 25 percent of survey respondents thought problems in the economy were easing up, but 46 percent saw conditions either getting worse or remaining unchanged.
Many builders and developers thought that, at the beginning of 2009, the economy would improve by the end of the year, but many builders haven’t seen that improvement, says Bill Feinberg, president of Feinberg & Associates, an architecture firm, and founder of the Strategic Alliance, a group of eight real-estate related companies that conducted the survey.
Builders have told him, though, that they are seeing a pick-up in traffic at condominium and single-family home sales offices, he says, and many are seeing higher sales volume compared to the same period last year. The next few months could be telling, as historically, many people make plans to move after the Super Bowl, as spring approaches and families want to relocate in time for the new school year.
But, despite the rough economic times, many buyers are still demanding extras and upgrades. Builders said that 57.1 percent of buyers look for upgraded appliances, while 42.8 percent want open floor plans, according to the survey.
Many builders, however, have had to make adjustments to new economic realities, Feinberg says. Many are cutting down on the square footage of the apartments and condos they build, using less expensive construction materials such as stucco instead of brick.
He said he knows of one New Jersey apartment community that was to feature both a tub and a shower in the bathroom, but, after some thought, the builder eliminated the tub.
Builders have also made changes in their marketing campaigns, the survey found. While 60.7 percent of the survey respondents continue to try to reach potential customers through traditional means such as brochures and flyers, 67.8 percent said they are also using some new channels, such as Internet marketing, while 50 percent reach customers through print and broadcast advertising.
While builders have found that new media, such as Facebook and Twitter, is successful in attracting buyers among young professionals, some builders have also found success using these marketing tools in 55+ communities, Feinberg says.
There are some reasons for optimism going forward, he says, as many buyers may want to buy before the new homebuyer tax credit expires in April, and interest rates are still low. Where many buyers were looking to lowball builders one year ago, that attitude has changed somewhat.
“There’s more of a civil dialogue now,” Feinberg says.