Interview with Bob Mirman
OC Metro - 1996

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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.

Copyright 1996, OC Metro
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