18 Aug Finding The Sweet Spot In The Luxury Market
Builders everywhere are trying to design new homes with the latest in sustainable technology while trying to maintain a high profit margin. There are several experts that see unstoppable reduction in profits for new homes. Most of them think that this is a change that builders need to start accepting for the future.
Builderonline.com has a great article featuring a builder, Bill Freeman. Freeman built a 3,000-square-foot house in Essex, Conn. with complete dedication to energy efficiency and savings. What he found out was that it’s difficult to build a large and luxurious home with a high HERS rating. He then called in a consultant who helped make a few minor tweaks to increase its rating. Tweaks along with his initial plans cost him more than usual, which will ultimately result in a lower profit margin.
The reality of the market is that striking a balance between profit and sustainability is a challenging task. In Freeman’s words, “A lot of builders don’t like hearing that, but it’s the reality now.” The challenge, especially in the luxury real estate market, is continuing to provide consumers with what they want while also obtaining high-energy efficiency scores and sustainability certifications.
All of this will certainly dictate how we market these types of homes. Just like new home designs, we must also strike a balance between luxury and sustainability in our messages. It is also important that sales agents are able to strike that balance when dealing with potential buyers.
As home building starts to pick up, everyone involved in the building and selling process needs to be on the same page when it comes to finding the sweet spot in the luxury market.