Convincing the Old Boys that New Media makes sense

This is a duplicate post from David Allison’s column on RENX.ca, a Canadian Real Estate news website.

I’m in Toronto this week, and noticing some distinct differences between how real estate developers promote the homes they have for sale, compared to how things are done in Vancouver. But regardless of how you choose to promote your project, one thing is consistent. The buyers you are looking for are online. Are you?

“Research studies show that 9 out of 10 home buyers start their search online, even before contacting an agent,” says Matthew Slutsky, the man behind the popular Toronto/Vancouver/Calgary real estate development listing and map service called BuzzBuzzHome . “I first conceived of the idea for BuzzBuzzHome while working as VP Development for a Toronto land-developer/builder, and became frustrated with the lack of a publicly accessible online listing of all new residential developments,” he said to me over a cup of coffee last week. “So I quit my job and took a chance, and, well, it paid off. We have 35,000 visits a month now. And developers here are realizing the power of online to help sell homes.”

This mirrors our own experience at Braun/Allison Inc. for the real estate developers that we work with. Projects that combine traditional media channels along with online channels are finding a bigger audience, faster. And some of the results are startling. I’ve mentioned in this space before that we’ve had as much as 70% of our registrations for real estate projects come from Facebook advertising. And when we back up newspaper and outdoor with social media, blogs and online ads, we are able to find this sweet spot that makes the whole greater than the sum of the parts.

So what’s stopping the real estate development industry from embracing online channels wholeheartedly? Based on the conversations I’ve had here in Toronto this week, and my own experience in Vancouver and with projects all over the world, the answer is obvious. Age. The people running development companies are mostly older, and, while I am generalizing, they are scared of social media and most other online opportunities. Oh sure, they all realize they need a website. But start talking to them about web 2.0 or SEO or SEM or Social Media or any of the other tools we now have at our disposal, and they retreat back to the safety of what they know and understand. Print.

What’s an eager (younger) marketing director to do? How do you convince the old guard to take a chance and try something new? I have a couple of suggestions.

First, break it down into dollars and cents. Explain that for the cost of one full-page print ad you can launch an entire online program.

Next, spend your money wisely. While the most intriguing benefits of online advertising and social media are long-term, focus first on the immediate gratification angle. Use fast-result options like a gateway drug to get buy-in from the senior team. Facebook ads are an impressive and affordable option. So is BuzzBuzzHome. Start small with outlets like these, and gradually you’ll win them over.

Marketing Real Estate Developments: Thinking Long Term

This is a duplicate post from David Allison’s column on RENX.ca, a Canadian Real Estate news website.

What if your development company built a brand that would make consumers interested in your product in good times and bad?

At least for the moment (who knows what will happen when interest rates rise?) many real estate developers are having a great time selling pre-sale condominiums. Here in Vancouver, line-ups are once again ho-hum news, and in Toronto, properly priced and quality-built projects are doing just fine, thank you. So what’s the problem? Short-term thinking caused a lot of heartaches and headaches last time the market corrected. I think the real estate development industry needs to plan now for the next economic event that will eventually happen – be it interest rate driven or otherwise.

When things are going well, it’s easy to keep doing things the way we’ve always done them. It’s easy to fool ourselves into thinking that sales velocity will continue, and prices will keep rising. Anyone who’s been in the business of selling real estate developments for more than 5 minutes knows that even at this very moment, some parts of the country are still in recovery mode. It bugs me that many developers have conveniently forgot how bad things really were a few short quarters ago.

What if instead of every new development being a short term sales & marketing assignment, each was considered as another opportunity to build the developers brand for the long haul? What if your development company built a brand that would make consumers interested in your product in good times and bad?

Even during the worst economic times, people still need to move. They need to downsize or upsize based on kids leaving home, or new babies being born. They need to relocate because of work, or because they are newly married, or newly single, or because of other unavoidable lifestyle changes. If your company had worked hard to win their trust over the long-term, through good times and bad, who do you think they’ll turn to when it’s time to move again?

On March 29th, RENX has designed a breakfast seminar in Toronto to address these issues. Hunter Milborne, of Milborne Real Estate and Chairman of Sotheby’s International Realty Canada will talk about the condo market in the GTA for the next 12 months. Jennifer Podmore Russell, from Deloitte & Touche, will share recent research she’s done on the effects of interest rate increases on the buying power of consumers, and the building power of developers. And I’ll talk about Marketing Journalism, a new way to think about the marketing function, based on my book Sell The Truth. The seminar costs $25, includes breakfast, and proceeds will be donated to a GTA charity thanks to the generosity of our sponsors.

You can register here. It’s a small investment in the future, and will leave you prepared to think long term about how our industry moves forward.

Thanks to our generous seminar sponsors!

Research Predicts the future of Real Estate Development

This is a duplicate post from David Allison’s column on RENX.ca, a Canadian Real Estate news website.

March 29th RENX Breakfast Seminar speaker profile: Jennifer Podmore Russell

We’ve all heard the throat clearing and hedged statements from Federal officials about interest rates going up at some point this year. It’s anyone’s guess as to when. And it’s accepted logic that any upward federal rate change will influence mortgage rates in the same direction. But what will this mean to the new home development industry? How will consumers react? What should we build in anticipation of these new realities? Jennifer Podmore Russell can shed some light on this.

Jennifer Podmore Russell is a Senior Manager in the Deloitte & Touche Financial Advisory practice in Vancouver, and specializes in advisory work for the construction and development industry. She’s been at this crystal-ball-fused-with-research game for more than a decade. She has a background in commercial real estate with Colliers International, and went on to found MPC Intelligence; a real estate consultancy firm which focused on best and maximum use analysis, and planning/valuation studies for residentially focused developments. Now with Deloitte, she spends her days providing trend analysis, demand forecasting, market planning and opportunity assessment to Deloitte clients. All of which could sound very dull, until you realize that she knows far more about tomorrow than you do.

“It’s fairly evident,” she says “that if wages don’t change, but mortgage rates do, it will change how much house people can afford to buy.” Consequently, she’s spent a lot of time lately analyzing the incremental impact of this, and what it will mean to our industry. “It’s important to remember that a rate increase doesn’t just impact consumers. It also is a game-changer for developers, because it becomes more expensive to build. We make sure our clients have planned for this ahead of time.”

If rates go up by 1%, what happens? What contingencies are required so it doesn’t overtly reduce the bottom line for developers? How do you make presales work in an environment that is not fuelled by fear of rising rates? What is the new normal? “It’s about establishing standard business practices in a changing world.” Podmore-Russell says. “The more information you have, and the more scenarios you are aware of, the better equipped you will be for success.”

What else do developers need to be thinking about? “Let’s assume that prime sites in downtown locations are more coveted, and more expensive, if you can even find one. This scenario requires developers to stake a claim in more suburban areas. How can you be successful in these situations? How can design, communications, and consumer insight help you stand out from the four other projects surrounding you that you are competing with?”

Podmore Russell has crunched the numbers, and she’s willing to share. Interested? Sign up to hear her speak, along with myself and sales guru Hunter Milborne, at the RENX Breakfast Seminar on March 29th. You can register by clicking here. Proceeds from this seminar will go to a GTA charity, thanks to our generous sponsors; The Toronto Star’s Website NewHomes.com.

We have one sponsorship opportunity remaining, at $1500, and if you are interested in getting your company name in front of a room full of real estate movers-and-shakers let me know. You can email me at david@braunallison.com for more information.

Phoenix market hits bottom. Ready to grow.

This is a duplicate post from David Allison’s column on RENX.ca, a Canadian Real Estate news website.

When real estate industry insiders talk about the cities in the United States hardest hit by the recession, Phoenix is near the top of the list. However, I was there last week, and the situation seems to be changing.

There are several signs that real estate prices in Phoenix have found the bottom. Granted, most of the talk is conjecture at this point, but articles like this one are easy to find online and in the carbon-based media. These sources indicate that the fundamentals are strong, prices are at the bottom, and the market is on a strong simmer, if not quite ready to boil over. This is the perfect time for investors and buyers to be thinking about Phoenix as a smart play.

One New York banker commented that large-scale investment properties in default have had, until recently, only one or two potential purchasers sniffing around. In the last couple of months, however, as many as 30 or 40 offers are being received. When the big boys with the money to buy buildings of this scope and scale are lining up, it’s a good indication that market confidence has returned.

Vancouver-based Rob MacDonald, of MacDonald Development is a veteran of the real estate investment sector and is in the midst of re-launching a condominium tower in the urban centre of Phoenix. Formerly sold as Century Plaza at the peak of the market, the building has been renamed One Lexington.

“I’ve been visiting and working in Phoenix for decades, and I’m very bullish on what’s happening in the city centre,” MacDonald said. “With the new light rail transit as a catalyst, the downtown and midtown areas are showing exciting signs of a new urbanism. In very short order, Phoenix will have a thriving core. It’s this revitalization, combined with the market recovery that I’m seeing all around me, that made our team confident that One Lexington would be a good investment.”

It turns out that a good investment for MacDonald Development is a good investment for smaller investors too. With far-reaching views, huge outdoor swimming pool, fitness centre and a light rail station out the front door, pricing at up to 50% less than the previous sale prices should attract past-purchasers and new devotees as well.

While it’s true my company is involved in this project (it’s a great example of Sell The Truth in action) and that I therefore have an abundance of belief in the offering, I’m not alone. The blogosphere and the traditional media are excited, and words of encouragement are flowing. You can read the most effusive post here. Even the Canadian media are getting in on the act. Here is the article in the National Post on the project.

Why am I devoting a column to a project that I have a vested interest in, and opening myself up to accusations of bias? There are two great reasons.

First, as stated, this project is a very good example of Sell The Truth in action. Take a look at the a href=”http://www.onelexington.com”One Lexington website/a and see how much straightforward Marketing Journalism we’ve packed in. Website visitors will know exactly what’s happened before, what’s happening now, and all the great reasons to engage with the sales team. This is the antithesis of how real estate projects were marketed in the past. Unfortunately, some developers still haven’t got the memo that a whole new breed of consumer expects the facts up front, and isn’t willing to follow the old rules and do things the old way.

More importantly, readers of this column are in the business of real estate, and I think a resurgence of interest in the seriously recession-struck Phoenix market is big news. Local journalists agree with me. And so does the National Post. It’s time to look at the Phoenix market again; as investors, as buyers, and as a city to watch as it rises from the ashes of one of the worst periods of economic turmoil any of us have ever seen.