The title of this post plays on the popular book by Spencer Johnson, named "Who Moved My Cheese." It is essentially about 2 mice and two miniature humans who everyday go to the same spot for cheese. Eventually the cheese dwindles, and it is the mice who have planned ahead by searching for a new source of cheese. The term "IF YOU DO NOT CHANGE, YOU BECOME EXTINCT" comes from the book, and can easily be applied towards our current and recent real estate market. In my local market of Columbia, SC the number of licensed active real estate practitioners have been reduced by nearly 40% within the past year.
One can view this as a positive change, in that there is less competition. On the other hand, it is sad to see so many become "extinct." So what is the secret to survival? Change with the market, and do not be afraid to advise your clients honestly about what they need to do to change with the ebb and flow of the market as well.
Case in point--one of my clients, the The Gates at Williams Brice (www.thegatesatwb.com) has been in development of multi-family dwellings such as condominiums for over 50 years throughout the United States. Like much of the rest of the country, the slowdown stagnated sales. We needed a plan that would closeout the project and sell the remaining final 27 units* of the original 158. The developer and I worked together in developing a price point that was "SELLABLE."
*Limited number of incoming producing units available.
The much publicized $8000 first time home buyer tax credit has substantially increased home sales for properties priced under $180K in the Columbia, SC market. Fortunately the developer was not only able to meet and BEAT this price point, but unveiled a incentive package in addition to the drastic reduction that really 'wowed.' Along with a local advertising firm, we then crafted a marketing plan to effectively implement and promote the new pricing.
The initial average pricing for these units were about $230K. The new price point averages $158K, over $70,000 in average reductions. In addition to this, up to 6% in buyer incentives is also offer per lender approval. Based on a price of $158,000, this equates to nearly another $10K. But wait! There's more.....another $5000* off the reduced pricing. By the time you consider the $8000 tax credit, that's nearly $88,000 in savings/rebates/incentives! *Specials subject to change at anytime at seller's sole discretion.
This program culminates in the BUILDER CLOSEOUT EVENT scheduled for 6/13/09 at
1085 Shop Road, Columbia, SC 29201, noon-5pm.
The result so far? 5 contracts pending and we have yet to find out how many will contract on the big event. The point is that one cannot be afraid to be flexible and change with the market. Then exceed expectations and you will have a formula for success.