No Guts No Glory
I would like to ask a question of the homebuilding community. We often say we are interested in innovative product, plans, cutting edge technology and new design. However, how many of you are willing to go that extra mile to deviate from the norm, to take a chance that may put your pricing above the market. Will the market accept it, promote it and embrace it? More importantly, will the market be willing to pay for it? This is the $64,000 question.
When a gamble works, you are considered a trailblazer, someone with vision who was willing to stick to your convictions. You are recognized as an individual who not only has their finger on the pulse of the market, but has the uncanny ability to know what consumers want before they know they want it. Like Steve Jobs if he had built homes instead of computers. However, if you miss, you are considered a poor risk taker, someone who missed the market and did not recognize that you cannot sell what is not asked for. Like what almost happened to Apple when Steve Jobs first left the company.
It is a fine line, and one which has no definitive answer. I toured a top selling community the other week that has multiple builders and is located in a price sensitive sub-market. Most product tends to follow tried and true layouts, and pricing per foot is fairly standard across the product segments. Then one of the builders tried something different with a new product line. While I would not call the changes radical, they are of a nature to be significant enough to be very noticeable. Like test driving a BMW after looking at Fords and Chevys (sorry Ford and Chevy drivers. No harm intended.) It obviously carries with it an increased base price relative to competitive product, but you definitely get a home that feels more valuable than the other options available. I am not talking upgrades here. It is all about design, utilization of space and incorporation of light.
I don’t know if it will succeed or fail. But I sincerely hope it succeeds. I want to believe that homeowners will recognize value when they see it and will be willing to stretch a little further to invest in something that raises the bar. I am not implying that all good ideas can sell at a premium. However, it is refreshing to see an entrepreneurial spirit shine through now and again. Regardless of what market research and consumer focus groups tell us, you never really know what will work until you can dedicate yourself to an ideal and have the courage to implement it.
It is good that Steve Jobs came back to Apple. It is also good to see builders taking calculated risks with product and design. But it is a gamble. You may not be the next Steve Jobs. But do you have the conviction to try?
Until next time…
Keep kicking the dirt!
Jeff Gersh is President of Gersh Consulting Services, a real estate advisory firm, headquartered in Orlando, FL. He may be reached at firstname.lastname@example.org or 407-468-9328