Homebuyers key on ‘quality of life’ instead of ‘standard of living’
Santa Fe home builders, trying to make the most of sales opportunities as first-time buyers rush to meet a tax-credit deadline, are rethinking how they design, market and price their products in the midst of a major attitude adjustment among buyers.
“It’s never going to be the same market again,” said Alan Hoffman, co-founder of Oshara Village and a sales representative for Artistic Homes of Santa Fe, a new builder of homes in the Oshara planned community off Richards Avenue near Santa Fe Community College.
To sustain a recent upturn in sales driven by first-time homebuyers, Hoffman said builders and community developers must recognize that buyers now make a clear distinction between “standard of living” and “quality of life. ”
In buyers’ minds, they no longer are synonymous, Hoffman said.
When it comes to homes, he said, a growing number of consumers now view “standard of living” as referring to expensive amenities including granite countertops, kiva fireplaces and tiled walls. And those amenities are no longer as important to many buyers — especially first-time buyers — as they were in the past.
“It’s a whole new paradigm,” Hoffman said. Homebuyers are more interested in “quality of life” factors, such as “doing what I like,” lower mortgage payments to reduce financial stress, a sense of community with their neighbors, short work commutes (even walking or biking), and having a courtyard or patio for family activities.
Hoffman said buyers are beginning to realize that the “less expensive the home, the more freedom you have. It’s way more about being in a nice community in a reasonably priced home.”
Isaac Pino, general manager of Rancho Viejo Inc., would concur.
“To sell homes in this market, we had to redesign the product,” Pino said. “The homes were too big and too pricey, and people just weren’t buying them.”
At the beginning of 2008, some Rancho Viejo homes could easily be 3,000 square feet and sell for up to $700,000. In the past few months, the new homes have become much smaller — 1,400 to 1,500 square feet, about 500 square feet smaller than the previous average, and prices slashed closer to $200,000, Pino said.
He said sales quadrupled from about three homes a month from January through March to 12 homes a month April through July, with about 75 percent being first-time buyers.
Besides building smaller homes to lower the cost, Rancho Viejo builders switched from in-floor heating systems to forced air. Pino said builders also “managed the product a little tighter,” hunting down lower prices for electrical and plumbing work.
“Now the economy dictates a less expensive home and we have answered that demand by changing our product,” Pino said.
Another Santa Fe builder, Centex, also has redesigned its basic homes, but with less emphasis on reducing amenities or cutting square footage.
“They are not smaller, just designed more efficiently — that allows us as a builder to have less waste in the construction process,” said Jacque Petroulakis, spokeswoman for Michigan-based Pulte Homes, which recently acquired Centex.
She also noted that instead of eliminating creature comforts, the new models actually have more extras — such as air conditioning — than previously.
Petroulakis said Santa Fe Centex homes now range from about $160,000 to near $300,000. She said she could not release sales figures because the company is publicly traded.
Rancho Viejo’s Pino said that many builders, despite their price and design changes, worry that unless Congress renews some version of the tax credit, the uptick in sales will vanish. As though to prove the point, as the backlog of homes was bought out and the number of buyers who can still meet the tax-credit deadline has dwindled, Rancho Viejo sales in August and September slipped back to two or three homes a month.
Source: Dennis J. Carroll | For The New Mexican