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They file in, they sit in the mirrored room, they
listen to the questions and answer Robert Mirman,
and they dictate to homebuilders all the likes and
dislikes about the home they want to buy.
And Mirman passes on the information from potential
homebuyers to homebuilders, who in this tough decade
of selling have been listening like never before.
You want porches? You got porches! This is what
Mirman learns from focus groups in Orange County and
throughout the nation.
Mirman is the CEO of Irvine-based Eliant, a
consumer research company that provides vital
information to subscribing builders about the mood
of the buyer. Each June, he releases his annual
survey, this one called “Vision ’96, the
California new Homebuyers Preference Survey” at
the Pacific Coast Builders Conference in San
Francisco. The other principals that administer this
project are the Meyers Group of Newport Beach; Color
Design Art of Pacific Palisades; and Market
Perspectives of El Dorado Hills. Vision ’96 is based
on the answers of nearly 3,000 home shoppers. A few
questions: How long do you think you will live in
your next home? And, what is the likelihood you will
purchase a home in the next six months? And, in
which direction do you feel California’s economy is
going during the next six months?
A few days before he wrapped up the final focus
group and a few weeks before finishing the
tabulation for Vision ’96, he sat with OC Metro
Editor Craig Reem.
Mirman, reflecting in his office about what he had
learned face-face with potential buyers this year,
discussed his findings.
OC Metro:
Sales figures being up this year, what is the cause
that is prompting people to buy homes in ’96?
Robert Mirman:
It’s happening across the board, except the board is
limited in a certain respect to the entry market.
There is a tremendous resurgence of interest in the
entry market. The primary reason is that the demand
for housing has been pent-up for too long. Interest
has been bubbling under the surface for so long.
People haven’t been able to move and the recession
was so bad and jobs weren’t available. Jobs are
increasing in California…the confidence numbers are
up…people can start looking with a little more
optimism. If they’re living in an apartment, or
they’re living in a condo and they need a little
more space and they haven’t moved in five years,
they’re looking more favorably at the possibility of
moving. Second of all, interest rates, historically
speaking, are in a very positive position. So
affordability for these homes is still very good.
Plus there are so many choices out there now.
OC Metro:
Supply is up?
Mirman:
I don’t have those figures, but the style, the
choice, the variety of homes. Builders have really
smartened up about what they’re offering. The
quality of the home they are able to offer to a
$220,000 buyer is so much better today than even
three years ago. The quality of the amenities, the
quality of workmanship that has gone into it, the
whole process has been upgraded tremendously. Every
year they get better and better at doing that and
our data shows that. My clients’ buyers’
satisfaction level continues to increase every year.
OC Metro:
Much of what you’ve referenced was occurring in ’95,
yet it was an off year. Did it take a while to get
people into the buying mode?
Mirman:
It’s reached a critical mass with all these
different issues – the economy and the job market
and the confidence level. The bankruptcy has also
declined in terms of importance. The sky hasn’t
fallen in here, folks. There doesn’t seem to be this
tremendous disaster that’s going to befall us.
There’s no volcano coming out from under the ground,
and the only real negative on the horizon is the (El
Toro) airport issue. Everything else seems to be
going in a positive way. That’s why ’96 seems to be
going so well.
OC Metro:
Is it that people have run out of reasons not to
buy?
Mirman:
No, this isn’t a boom. But from my perspective, I’d
just as soon have a nice, steady slow continued
growth than have a big boom market for a couple of
quarters and have the bottom fall out again.
OC Metro:
Home buying remains an emotional process?
Mirman:
People who drop out of the process are often looking
for excuses. Maybe they have run out of excuses and
the scene is so favorable it keeps drawing them in.
OC Metro:
Are you getting a general sense from your focus
groups of optimism toward buying?
Mirman:
Much more so this year. Numbers are up in the
‘likelihood of purchase in the next six months’
category. We’re about 20 percent higher this year in
terms of the potential for purchase than we were
last year.
OC Metro:
Homebuilders are still waiting for that turnaround
year. Is it possible that ’96 might represent a
historic turnaround that will fuel home buying into
the next century?
Mirman:
It’s been building for some time now, and we have
started to see the evidence of all this in the first
and second quarters of this year, particularly the
first quarter. Whether this is the beginning of this
major resurgence of the home building market, I hope
it is. When the homebuilding market comes back, that
really signals that the state has come back a long
way. Every other industry in California has really
come back a long way, and homebuilding is the one
significant facet of the economy that really hasn’t
made a marked increase over the last couple years.
It’s been building slowly, but nothing major.
OC Metro:
Is it a twin reality that homes are not only
better-designed and high quality but they are being
marketed better?
Mirman:
Marketing is improving; builders are much more in
tune with customers’ needs…rather than as they used
to be with, ‘This is what I have to offer.’ Now they
are marketing more to the buyers’ needs for
community, buyers’ needs for neighborhood, buyers’
needs for security, buyers’ needs for education
opportunity. So the product itself, for the wise
builders, is not the be all and end all. Has every
builder jumped on that? No, but they will. Now we’re
starting to talk about how you want to live. Now
it’s not as much what you live in as the manner in
which you live in it.
OC Metro:
How important are options that builders give to
buyers – to add an extra bedroom, or an extra work
space, or turning a three-car garage down to two so
you can have a bonus room?
Mirman:
This is not just a throwaway issue. This is one of
the major questions that builders wrestle with
today, and one of the primary things that
differentiate the buyer of today than from three or
four years ago. Buyers today…are seeing more and
more product and are more sophisticated about what
they want.
OC Metro:
No more one-stop shopping?
Mirman:
Eight percent on a national basis buy the first
time. Almost 50 percent are what you call the
analytical buyers and take at least five stops to
buy and the patient buyers take at least two to
five. Ninety-two percent are taking their time to
buy, and that’s being extended. The second issue,
and the more critical of the two, is that their
expectations on how long they will spend in their
home have increased. What does that do? That changes
the whole perspective on what they need in terms of
their house. They want quality because they will be
in there a long time; they want durability; they
want brand names because they want somebody they can
trust. So General Electric is the No. 1 brand of
choice (for appliances). They want flexibility in
their design, so as they grow in their house, there
is flexibility to expand. |