Forget what you heard last year about missing first-time buyers – in 2016 they’re going to be back in action after an increased showing in 2015. Last year 28% of buyers were between the ages of 25 and 34. So far in 2016
This is due to a combination of factors, most of which you’ve probably seen in your own markets: rising rents, more jobs, and improved credit access, to name a few. Here are a few other keys:
Areas of the US with strong growth potential for builders have all of those buyer-friendly features that make owning a home possible for a larger share of the market. Affordable cities like Providence, St. Louis, Sacramento, New Orleans, Memphis, Charlotte, and Virginia Beach.
Cities located in areas with strong educational institutions and local economies, such as Atlanta, Boston, and San Diego, are also among the top markets with growth potential. Jonathan Smoke’s report at IBS also listed Denver, Houston, Austin, Jacksonville, the DC area, and Minneapolis-St. Paul, among others, as markets likely to emerge in 2016.
The Right Neighborhoods
The key to taking advantage of favorable conditions in a specific market lies in understanding your local buyers – what they’re looking for, and what their obstacles are. First-time buyers value safety above all—and will be taking “location, location, location” to heart. A home close to work wins points. They want good quality construction and more space, especially as they move from renting to buying.
One challenge for builders in 2016 is that first-time buyers don’t see the appeal of new homes as other age groups do. Almost half, 46%, of polled first-time buyers (ages 25-34) prefer existing homes.
However, reputation is a strong influencer. If you emphasize (and live up to!) your promise of quality, you will have a strong shot at this group in 2016.
Builders who can build in safe neighborhoods in emerging growth cities, with a strong promise of quality, stand a much better chance of capturing first-timers in 2016. Choosing Better Technology in your homes can help. These days, precision framing is stronger, safer, and more code-compliant than “sticks,” which can help you build better homes—and your reputation.