Over the past 20 years the American Dream has shifted from homeownership to living a luxury lifestyle
By Mike Moore
‘New’ homebuyers think more differently today than ever before. They are more instant gratification driven than ‘used’ homebuyers and do not want to move into a ‘new home fixer upper.’ By this I mean they don’t want to have to personalize their ‘new’ home after they move in, they want a finished home that reflects their chosen lifestyle. That’s because over the past 20 years the American Dream has shifted from homeownership to living a luxury lifestyle.
The good news for homebuilders is that nothing impacts a person’s lifestyle more than the home they choose to live in. The bad news is that defining a luxury lifestyle has become as personal as defining success. This reality is a challenge for today’s production homebuilders who so effectively provided for the past American Dream, but today need to become new home retailers who build personalized homes on a schedule to fulfill the New American Dream. With lifestyle replacing homeownership, homebuilders now compete with luxury rentals that provide location and amenities that enhance people’s lives more than ever before. In addition, choosing to rent a lifestyle is a fast and simple way to fulfill this New American Dream. So, personalization of production homes, which started over 20 years ago, has now grown into the number 1 reason people want to buy a ‘new’ home instead of a ‘used’ home.
Everyone likes instant gratification, but ‘new’ homebuyers are driven by it; it manifests itself by creating the desire to move into a finished home that reflects their personal style and meets their definition of luxury. Not acknowledging and adapting to the New American Dream is holding homebuilder’s sales back. To date, the new homebuilding industry struggles to capture more than 10 percent of the home sales market, even though study after study shows that as many as 19 percent of the people shopping for homes only want a new home, and 34 percent strongly prefer a new home. That’s 53 percent of the people shopping for homes that prefer to buy a ‘new’ home with only 10 percent buying one. Think about those numbers for a minute, then think about whether you make personalizing your ‘new’ homes easy or difficult.
Steve Jobs was quoted as saying, “If you want to sell technology, you have to start with the customer experience and work your way back to the technology.” This is great advice for the homebuilding industry today. We could easily double the number of ‘new’ homes sold today if we started with what ‘new’ homebuyers wanted, instead of trying to build homes that mostly fulfill an old American Dream instead of the new one.
Along with all the design choices ‘new’ homebuyers want in order to personalize their home, they expect a ’new’ home to provide basic home automation, or smart home features and personalized choices that allow them to live the luxury lifestyle as they define it.
Think of all the choices a ‘new’ homebuyer needs to personalize their home before they move in. These are not just building materials, they fall into two product categories that help you sell more homes. First, design options that will allow the homebuyer to move into a home that reflects their personal taste. Second, lifestyle options that allow them to live in the home the way they want to live, and new home technology is the fastest growing lifestyle option. Homebuilders who embrace personalization and make the process more enjoyable will attract the new home shoppers who aren’t buying and increase their sales.
New home technology and automation can be as important to ‘new’ homebuyers as the flooring, cabinets, countertops, appliances, and other design options ‘new’ homebuyers have used to personalize their homes. People do not buy a new car today if it doesn’t have automatic lights, seats that auto-adjust, a variety of streaming audio solutions, built-in adjustments for road noise, auto braking and lane correction along with a wide range of colors and amenities to choose from. So why offer a new home that has the same manual light switches that are found in ‘used homes’ and have existed since the dawn of electricity? Is this even a ‘new’ home? I can answer that: not in the mind of a ‘new’ homebuyer. In a ‘new’ home, homebuilders need to ensure that everything between the foundation and roof is integrated, connected, and easily personalized to meet the ‘new’ homebuyer’s definition of a luxury lifestyle. It’s about defining what a ‘new’ homebuyer’s definition of a ‘new’ home is versus their definition of a ‘used’ home or a never-lived-in older model. Understanding this will keep a homebuilder from building ‘new home fixer uppers’ that turn off many new homebuyers.
To fulfill the New American Dream, a production homebuilder needs to become a new home retailer who builds personalized homes on a schedule. This is the solution that will grow new home sales beyond the traditional 10 percent of the home sales market and create a dramatic increase in new home sales.
Mike Moore is a motivational speaker, leadership and peak performance coach. He combines his expertise in retailing, interior design, vendor and new home sales to address all aspects of the home buying experience. He may be reached at techomebuilder.com.