If You Build It, Will It Sell?

How one development company made sure their project was on target.

Market research is a key component in the residential development sector. At every phase, research provides insight and direction to guide the developer toward the successful completion of a project.

Most successful residential communities incorporate market research at some point in the process. This may include one or more of the following phases:

• Concept testing
• Feasibility study
• Product testing (floor plans, designs, amenities)
• Marketing/advertising testing
• Traffic surveys
• Prospect surveys
• Buyer satisfaction surveys (at contract signing, design, construction, closing, and warranty)

This case study demonstrates how one developer used market research to better understand the target market. Based on research among prospects and homebuyers, the developer was able to design homes and a community that appealed to the broadest segment of the market at an optimum price point.

A telephone survey was conducted among homebuyers who recently purchased in the community and prospects who recently visited the model/design center.

Objectives of the research were to assess satisfaction among buyers, measure the importance of amenities and design features, identify voids and areas for improvement, and determine the preferred floor plans and home designs. The research also obtained valuable insight into pricing and expectations of homeowner fees.

The survey findings revealed specific preferences in home design including: optimal square footage; number of bedrooms/bathrooms; style (attached/detached); and various home features. Based on the research findings, the marketing arm was better prepared to include aspects that buyers and prospects desire in a new home.

Research revealed that the community’s marketing message was not reaching the ideal target market. The developer was able to clearly understand the importance of factors in the purchase decision and re- align marketing materials to better communicate the lifestyle the community offered. As a result, more qualified and interested prospects visited the property.

The survey also identified additional amenities that would add value and help to “sell” the community. Traffic and sales were up considerably once these enhancements were made.

All of the research recommendations that were implemented ultimately had a positive impact on the bottom line. With products that matched buyer needs, marketing materials that accurately portrayed the community, and the inclusion of value-added amenities, demand exceeded expectations and home sales soared.

From planning, to design, to development and marketing, the better a developer’s knowledge of the market, the more likely the project will be on target for success.

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