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| Understanding Home Buyer Preferences |
| Written by Jonathan Smoke | |
| 04.09.2008 | |
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Discuss this article on the forums. (0 posts) Our clients and partners know that one of our core strengths is the focus we put on understanding the new home buyer. Our research into housing demand and consumer groups encompasses years of direct experience and market research with a focus on new home shoppers, buyers and owners. In addition, through our partner company Rating Insights, we conduct our own formal surveys of home shopper and buyer preferences.  Therefore, when the National Association of Home Builders began soliciting sponsors for its 2007-2008 Consumer Preferences Survey, I was quick to sign up. As a sponsor of the study, my company BlueSmoke received permission from the NAHB to leverage the data with our own consumer research to produce insights into preferences by consumer group.We’ve spent the last two months digging through the survey results to create a new special report, Home Preferences by Consumer Group. The report identifies key preferences by consumer group regarding home and community features. Over the next several days I will share with you some of the overall observations we’ve made from the NAHB study. Today I’ll more focus on top-of-mind items that are important to every consumer group. Most Influencing Factors The majority of respondents expect to pay $150,000 - $200,000 for a home with 2,000-2,500 in living square feet. As you would expect, pricing expectations are heavily influenced by location. I found plenty of evidence in the survey results that consumers’ preferences are influenced by their perceptions of value and that consumers are realistic about what they can afford. For example, while the majority of respondents prefer four bedrooms, three bedrooms is a close second. Furthermore, three bedrooms are preferred by several consumer groups. Bigger isn’t always better. Likewise, the majority of respondents prefer a main level ceiling height of nine feet but with eight-foot ceilings on the second story. Some consumer groups preferred taller heights while some preferred eight feet throughout. The overwhelming preference for a garage is for a 2-car garage, but certain groups have higher preferences for a 3-car garage. And it’s not just the Elite buyers. The most important influencing factors toward purchase of a new home include living spaces or layout of home, energy efficiency, and better insulation. Importance of Being Green Since energy efficiency and better insulation were rated so highly and almost as important as the living space in the home, you could mistakenly interpret that preferences have decidedly shifted in a green direction. But, take note that “Environmentally Friendly” was another characteristic rated. While almost 40% of respondents identified it as an influencer, it came in 8th place of the influencers, well behind living space, energy efficiency items, easy maintenance, high quality items and community proximity. Home buyers are practical and not necessarily altruistic about their home buying decisions. Tomorrow, I’ll dig further into what’s more important—being green or being energy efficient. BlueSmoke’s Methodology and Consumer Groups Our consumer groups were designed to understand the nature and needs of new home demand to advance our understanding of home buyers as well as help our research partners and clients better estimate demand, design communities, and cost-efficiently plan marketing efforts. Our consumer groups are based upon the PRIZM NE segmentation system from Claritas, one of the most sophisticated and widely regarded sources of accurate and up-to-date demographic data and target marketing information about the population, consumer behavior, consumer spending and households in the United States. As a result, our housing-centric model can be used to estimate demand, plan marketing strategies, develop precise direct marketing lists, and monitor traffic and sales success. For more information on our methodology and our consumer groups, please see our special report on Understanding New Home Demand. For independent researchers or companies wishing to use these consumer groups, we offer training on our groups, underlying segmentation models, and research tools. We also offer the ability to generate direct marketing targeting lists based on the consumer groups and additional criteria. We can provide easy to understand reports profiling the shoppers and buyers of active communities so that builders can understand who they are attracting, who they are most effectively converting, and which prospects should get their highest priority attention. For information on these services, contact us or call 1-888-721-1116. 
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