It happened in a model home a couple of weekends ago -- a time when the political, foreign, and domestic newscasts were enough to deplete our national supply of tranquilizers.
A young, low-key salesman of new homes was conversing thoughtfully with an equally young, low-key couple interested in buying. Without any apparent change in demeanor, the buyers started making decisions. Soon they were well into a buying contract. The talk was quiet. Explicit. Apparently satisfying to everyone. It turned out that this was their fourth inspection of the models and the area.
This scene might be considered rather hum-drum, as far as the buying process is concerned. But to this housing market observer -- a person involved in the home selling arena for the past couple of decades -- the behavior of the young buyers was considerably different than that of a comparable couple in the 1950s.
There is a new breed of buyer taking command in today's market. Better educated, more equipped to contend with uncertainty and instability and usually presenting a joint stewardship for the family. A joint income. Two brains.
Just to insure that the model emerging in my brain was on track, I've compared my buyer model with those of several consumer-conscious housing professionals in the Washington area, namely: Milton Peterson of Burke Center, Clarence Kettler of Kettler Brothers, Dwight Schar of Northern Virginia Homes, widely known Steve Yeonas, and Ryland's new executive, James McEneaney. Not a word of dissent from any of them.
What follows are the five main features of this interesting new species moving into the housing scene, here in the Washington area as well as in all other parts of the country.
FEATURE ONE: The "model" buyers of the 1980s read the ingredients on the label rather than the advertising or puff copy. They do it in supermarkets and they do it buying a new home. The new breed of buyer appreciates a consultive type salesperson and an informative brochure.
Considering that the $55,840 (national aveage) sales price in 1979 is estimated to increase 146 percent more during the next 10 years to a median price in 1989 of $156,000, it's little wonder that the buyer of the 1980s is more attracted by a salesman's knowledge and experience, or that of the builder, than by any attempts to manipulate the decision-making process.
FEATURE TWO: The buyer of the 1980s does homework in the more substantive areas of decision-making. Once, years ago, the sales person would ask: "What are you looking for?" The answer, usually: "We're not really sure."
But not today. Today's answer is explicit. Expectations, desires and constraints are spelled out in dollars and cents. Dwight Schar points out that the better education factor applies to the buyer's friends and peer group at work. They syphon off experiences as well as knowledge which they communicate within the group.
It's quite apparent that today's buyers know how to communicate with each other -- husband and wife or couples of the same sex or singles. They seem to dwell on the subject of expectations. What can they expect from a change in life style? Or from an inflation hedged investment? Or from a galaxie of new friends and neighbors? And just how valid are these expectations? Sharpened expectations make adroit buyers. You can tell by the questions they ask.
FEATURE THREE: This new breed considers location to be the key decision, therefore one meriting considerable analysis and discussion. What do they mean by a better location?
The 1979 new home buyer profile compiled by the National Association of Homebuilders' Michael Sumichrast shows 48 percent want a better neighborhood (which translates into countless definitions); 33 percent define upgrade in location as being closer to work; 11 percent say it means being closer to shopping, and a stalwart 7 percent defines a better location as being closer to their relatives (no record of those wanting to get away from the relatives.)
This increasing buyer concern for the right location explains the enigma of the builder with a gem of a split and a super two-story at a rock-bottom price. (He'll pay the closing costs too). And he just sits there. Bought the wrong location. Usually because it was a steal.
But today's smart builders, knowing that location means so many different things to different buyers, offer as many locations as their dollars will allow. Instead of vast choices and selections in styles and products in the home, they're offering a vast choice in where the buyer might want to live.
FEATURE FOUR: If you want to spot one of today's new breed, listen for the word VALUE. They think, talk value much more than price and terms. Doesn't sound like much of a feature until you understand what they mean by value. It includes intangibles as well as tangibles. In the tangible department, they compare square footage, R-factors and financing terms to price.
In the intangible categories of value are the builder's sense of responsibility not only to his customers but to the community. As Clarence Kettler says, "It's easy for a builder to disregard the community welfare, believing that some buyers would prefer an eyesore if they can latch on to a lower price."
As a matter of fact the Kettler firm long ago determined that in order to do well in the greater Washington area, it would be essential to sensitize feelings for their buyers and for the communities in which they were building. Since that time, the firm's achievements have become legendary.
The HOW program of the National Association of Homebuilders, designed to help buyers find the assurances (warranties) they would like to have before they purchase, started with the modest assumption that some of the more astute buyers would respond. The response has been more like a deluge.
FEATURE FIVE: This category is perhaps the most intriguing. The 1980s' buyer can make decisions in completely gray areas without waiting for the scene to shift to white or black. One of the veteran salespeople in the area, Yeonas's Paul Lettieri says, "Until just recently, buyers would procrastinate, saying they would wait for inflation to unspiral or unemployment to scale down or interest rates to drop. But not today. Today's buyer knows a lot about what's happening, what has happened and even has a good handle on what will happen."
These, then, are the five features that characterize this emerging buyer of the 1980s. They present a positive force, in my opinion, for the entire industry including their fellow buyers. Those builders with salespeople trained in consultive selling have founda positive benefit in the feedback from the buyers who tell the builders rather explicitly what they want.