Buyers are somewhat fickle – they make their purchasing decisions based on the present, not always the future. An example: when gas prices are high, people buy for economy; when prices are low, they buy for power. This is a generality, but true, and it applies to home purchases, too. When times are great, homebuyers invest in luxuries and options; when money is tight, they go for value.
In the past few years, you may have been used to bundling your premium options on your models and maximizing profits. Now, though, a different approach might be more appropriate: pricing out standard models that deliver higher value; the most house for the money. As the drop in interest rates hasn’t happened yet as planned and the market remains sluggish, look at the models you’re ordering that will be on your lot in 4-6 months and project what the market may be wanting then.
This chart can give you some basic guidelines on how to match your product and sales strategy to the current or projected market:
How do you know? You can begin by following the trends you see in what people are looking at on your website and the information or quote requests you’re receiving. Those should all be tracked in your CRM. Also, if you’ve been in business long enough, check back to see what worked in previous recessions. Those are indicators of how you can prepare now for what’s coming.
Then, make sure your inventory, marketing, and pricing reflect your current strategy, and be quick to deliver the right message for the time. You’ll be rewarded with qualified buyers with realistic expectations that you can work with.
