National Housing Market Outlook

Energy and Innovation Sells Homes

August 3, 2010
When was the last time you sold 10 homes within 2 weeks of opening, followed by national press about how fantastic your homes are? When was the last time crowds spent more than one hour walking through your models because they were so interesting?
While conducting market research in Phoenix recently, our consultants Peter Dennehy and Ken Perlman toured a project in Gilbert, Arizona that was unique to them – despite their combined 37 years of experience! Here are some highlights:
  • Energy Savings: Homes at Lyon’s Gate by Meritage Homes in Gilbert, Arizona are 80% more energy efficient than homes built only 5 years ago. The advanced solar and thermal, the high performance walls, the spray foam insulation and all the other features on display in the model come included.
 
  • Creative Marketing: Touring the deconstructed model homes was so much fun, Ken said, ” I felt like a kid in a science museum.” Walls are torn open, floors are jack-hammered apart, and buyers are encouraged to climb around on the roof so they can “experience” the combination of products used in the homes. Creative demonstrations had buyers staying longer, touching and feeling, running the numbers and telling their friends about the experience.
 
  • Monthly Payment: The marketing revolved around what mattered most – money. When a builder gets buyers focused on the total cost of homeownership, the math can be compelling. Many buyers don’t realize a new home with energy efficient features can actually be cheaper than a resale on a monthly basis when you are considering utility costs.
 
  • Standard: Buyers were surprised and excited to realize these features were no extra cost for a home that was already competitively priced.
Building product manufacturers have been touting energy savings for years, with little (in our opinion) builder and consumer acceptance. The lack of acceptance was primarily attributable to the additional cost. However, the products are now both environmentally friendly and money-saving. For example, here is a focused application of new technology that claims to save 40% on heating and cooling activities.
Our conclusion: In markets where consumers care deeply about the environment and their monthly utility bills, we recommend differentiating your homes with energy efficiency. It will result in strong sales, great branding, and possibly even better relationships with local city officials.

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