The most satisfied new-home buyers in the Washington area last year were those who purchased a home from Pulte Homes Inc., the nation's largest builder, according to a survey released this week.
The survey by J.D. Power and Associates, the research firm best known for its rankings of car buyers' satisfaction, also showed that new-home prices in the Washington area rose 16 percent last year, the second highest rate of increase in the country.
According to the California-based research firm, the average new-home price in the D.C. market shot up from $370,000 in 2002 to $430,000 in 2003. Of the 25 markets studied by the company, only Palm Beach, Fla., had a higher rate of new-home price appreciation, 17.8 percent.
U.S. Home Corp. scored second-highest in terms of customer satisfaction in the D.C. market. Pulte's retirement-home division, Del Webb Corp., came in third. Only production builders that settled on 150 or more homes in 2003 were included in the study; 2,610 new-home buyers in the area completed the survey.
Besides the D.C. market, Pulte ranked first in customer satisfaction in 13 other markets around the country; the Bloomfield Hills, Mich., builder, which closed on 32,600 homes nationwide last year, finished outside the top three in only one market.
"They've figured out what works and have passed along those best practices to all their divisions," said Paula Sonkin, director of real estate industries practice at J.D. Power. "They're good at that. Not all companies are."
Sonkin said Pulte has pulled its ranking up bit by bit, year by year. When J.D. Power released its first survey of new-home buyer satisfaction in the Washington region four years ago, Pulte scored below average for the area.
"We made a conscious effort to change our culture," said Dave Graham, president of Pulte's Washington division. "We knew we weren't where we wanted to be and where other divisions of the company were."
Richard J. Dugas Jr., president and chief executive of Pulte, said that previously the company wasn't following its own best practices in the Washington market. "Now we have company-wide alignment," he said. "And we're very, very pleased with how that's paying off for us." Pulte and Del Webb built some 1,200 homes in the Washington area last year.
Dugas said his company plans to work harder to keep customers happy. "We want to turn our service teams from a find-it-and-fix-it mentality to a proactive homeowner-care mentality, where we call our buyers to find out how things are going."
The study identified nine factors driving overall customer satisfaction. They were, in order of importance, builder's customer service, home readiness, builder's sales staff, quality of workmanship and materials, price/value, physical design elements, design center, recreational facilities, and location.
Dugas said Pulte focused its efforts on the top three factors.
Overall, the study found that Washington area new-home buyers were 1 percent more satisfied with their builders this year than last. But they're still 11 percent less satisfied than the national average. J.D. Power measures satisfaction using an index that sets 100 equal to the national satisfaction level in 2000. This year, the Washington area average was 101, vs. 100 last year. The national average was 112.
The study also found that home-building permits issued in the Washington market were up 3 percent over 2002. In addition, it showed that Washington has a high proportion of buyers -- 33 percent -- purchasing a townhouse, condo or duplex, as opposed to a single-family house.
Most of the builders ranked in the study this year were large national companies, as opposed to two years ago, when Ausherman Homes, a little-known small builder in Frederick, won the top slot. Ausherman was bought last year by Drees Co.
"There's a lot of consolidation going on with builders," said Sonkin of J.D. Power. "So there's a lot of bigger builders now. But it's not a builder's size that dictates satisfaction. It's exceeding customer expectations."
Cory DeSpain, division vice president for Toll Brothers Inc., a large luxury builder that came in below the D.C. average, said he isn't too worried about his company's ranking. "Our sales have been spectacular and our customers have been happy, according to our own surveys," he said.
D.R. Horton Inc., which was ranked last in the D.C. market, at 55 percent below the local average, declined to comment.
Behind Pulte, U.S. Home and Del Webb, these builders ranked above the average for the D.C. area in order of satisfaction: NVHomes, Winchester Homes, Ryan Homes, Centex Corp. and Stanley Martin Cos. These builders scored below the average, in order of satisfaction: Miller and Smith, Lee's Hill Construction, Van Metre Homes, Drees, Ryland Homes, Engle Homes, Beazer Homes USA Inc., Toll Brothers, Washington Homes, Hylton Group, Brookfield Homes Corp., Richmond American Homes and D.R. Horton.