Builders who formerly relied on word-of-mouth and road signs for sales are now returning to the most basic source of first-time buyers: current renters. It has become commonplace across the nation for builders to gather renter contact information and approach renters with offers ranging from rent-with-equity programs to pet adopt-a-thons. Builders are designing smaller, more affordable homes and pushing federal and state tax credits to encourage renters to take the next step, and they are making an active effort, through direct mail and live seminars, to make an attractive offer to possible buyers (tenants). In spite of these efforts, the number of renters nationally who left their former residence to buy a home in the first quarter of 2009 was 31% lower than the same period in 2008.
first tuesday take: Recessions are wonderful for bringing the competitive spirit back to life. Now it is the brokers’ turn to get some press on their efforts to sell product – the multiple listing service (MLS) inventory of homeowners who also need to sell. The competition is rough, with the real estate owned (REO) landslide disrupting the norm at local listing offices; it now takes two sales to make the same dollar amount of fees as one sale in 2006.
Again, builders are able to get amazing press, dusting the local brokers who have been around longer and are more involved in their communities than the builders. A kiosk at the local bus station, airport, grocery store, or mall might become a more common sight in the future, a reminder of the 80’s and 90’s recessions.
Re: “Desperate Home Builders Woo Renters”, from the Wall Street Journal
