The top-selling, non age-restricted community in 2010 was the Irvine Ranch. How did they do it? They took the time to listen to their potential customers and redesigned the community. Here is insight about their success that you can apply:
- Even with their “A” location, sales were slow and prices were falling in 2008. They did not want to drop land prices.
- The company led an extensive consumer research effort that identified what consumers wanted in their community, their home, and overall lifestyle. They found a high percentage of predominantly Chinese buyers who were not buying. They put the research to work. They worked with designers, architects, their loyal builders, and experts to design niche products at the right price points.
- Because builders wouldn’t pay the land prices they wanted, they contracted with the builders to build for a fee only. They picked several very diverse builders with unique skills and forced them to work together, adopting the best disciplines from each.
The Result? The Irvine Ranch was the story of the year in 2010. Many were stunned when 10,000 people showed up for the grand reopening. Despite all of the builders believing that opening prices were too high, sales mushroomed and prices rose all year as the builders had a tough time keeping up with the demand.
Lesson Learned: The Irvine Company did not simply strip out design in order to drop price. They did take out the design features consumers were not willing to pay extra for, and added other features that were highly desired. They created designs that would meet the right price points that consumers wanted. The design component was critical to getting patient buyers to commit to buying. Positive experiences in the model homes overcame the negative or nervous emotions that accompany home buying during distressed market conditions.
You can learn from their success by positioning your product and neighborhoods based on solid consumer research and market positioning that makes sense for each of your communities. We are available to help if needed. Mollie Carmichael has led our Consumer Research efforts for the last three years. Previously, she worked for The Irvine Company for 10 years in marketing and residential product planning, and also for three public home builders over another 10 years. The Internet has made consumer research much more cost-effective, and having an industry veteran design the surveys and interpret the results makes all the sense in the world.