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32BUILDERS' DIGEST| OCTOBER-NOVEMBER-DECEMBER 2010WWW.BATC.ORGAs an industry we have always worked hard at marketing our product- new homes. But, as times change, so must marketing. For the past sev-eral years marketing wasn't much fun because it was so hard. And evengood marketing results did not move us forward. For this article I wantto ask and answer three questions that you need to consider if you areplanning a new marketing strategy. 1.Are we really on the way UP? Have we turned thecorner?The best way to find out is to consider whether we are selling morehomes now than previously. The answer--Yes. Using actual counted clos-ings/sales for the previous 12 months, we turned the corner sometimethis spring. One of the problems we have had is disposing of unsoldinventory. While closings have been increasing, the inventory numbershave been steadily dropping -- even in the last two years. To see thelonger-term trends, look at the graph in the August BATC Hot Sheet. Itshows both closings and inventories since 2006. This graph has the lat-est closing numbers from this last summer. 2.By price range, which homes are selling best?The original research that our company does is based on regular visitsto each subdivision. We actually count each start and each closing andeach vacant lot. Another thing we do is to investigate the price range ofthe homes being built and sold for each subdivision, verifying our infor-mation from the Parade of HomesSMbook. As you consider an updatedmarketing plan you need to know that the average price of all homes isdown by about $50,000. Take a look at the graph to see whether you areplanning to build and sell in a sustainable price range. 3.Where can we sell enough homes to justify amodel?The best thing I can do is to show you the best areas for building basedon the number of recent sales and a small but reasonable amount ofunsold inventory. Here is the list. There is one more question. But I don't have the answer. I believe youcan find willing buyers, but it is hard to find willing lenders. The latesteconomic news says that the banks are sitting on more capital cash thanthey have had for decades. Yet the news says that banks are making high-er profits. The economists think that "uncertainty" is what is preventinglenders from lending. (I thought lending was how lenders made theirmoney!) The buyers that we have had have had jobs, good income and a histo-ry of good rental payments, and still will not be considered for a homeloan. Our Builders' Associations must put a lot more effort into solvingthe reluctant lender problem. If some lender out there has the answer to this question, please letsomebody know. What can be done to encourage lenders to actually lendmoney for home mortgages?It Is Exciting to be Working on a NewMarketing PlanBYBETTYHARDLE//Residential Research Services Co. &Marketgraphics Research Group MarketingMarketingFeatureAre We Turning the Corner?040391402694014840026CLOSINGS PREVIOUS 12UNSOLD INVENTORYResidential Research Services 8-10Tu 2000400060004039140269 urning 402694014840026 MONTHSForecast of Starts for 201001000Under $175,000275,000425,000925,000Residential Research Services Co & MarketGraphics Research Group 8/103004005006007008009001000Forecast 100200$175-$224,000MarketGraphics 224,000$$225-$275,000$$275-$325,000$325-$425,000$$425-$625,000$625-$925,000 925,000$Over $925,000Over AreaPrice Range of Home & LotProjected 12 month Demand1Lakeville$275-$325,0001222Eden Prairie - Minnetonka$225-$275,000583Prior Lake & South Scott County$225-$275,0001524Prior Lake & South Scott County$624-$925,000295Brooklyn Park$225-$275,000436Hugo & NE Washington County$275-$325,000337Prior Lake & South Scott County$175-$225,000578Prior Lake & South Scott County$275-$325,0001219Woodbury$275-$325,0003310Ramsey & West Anoka County$275-$325,00038Rankings are based on a minimum demand of 24 per year Residential Research Services Co. & MarketGraphics Research Group and minimum unsold inventory.from the August 2010 ReportAREAS WITH STRONG SALES