APRIL 2011 |
www.opp.org.uk
BUSINESS
Fig 1. Number of homes sold per month in market Area of each community
2 3 4 5 6 7 8
1 0
1st 2nd 3rd 4th 5th Community Developed
Fig 2. Number of 55+ households in primary market Area of each community
2000 3000 4000 5000 6000 7000 8000 9000
1000 0
8984 6th 7th 8th 9th 8 7 6 4 3.5 3.8 2.4 2 1.6 6250 6380 3863 3106 2569 2545 1537 2478 1st 2nd 3rd 4th 5th Community Developed 6th 7th 8th 9th
Case Study: Replication Without Knowing the Conditions of Success After his ninth community, a developer commissioned us to uncover why his product was not always successful and to defi ne conditions for success. The following fi gures highlight our fi ndings. Figure 1 shows sales data from nine replicated communities. The fi rst four communities were more successful than the others were. The developer replicated the same community layout, type and size of homes, prices and marketing and sales programs, but sales were weak in six of the nine communities. Figure 2 shows the number of 55+ households in the primary market area for each of the nine communities. Results suggested that the fewer 55+ households in the primary market areas, the more successful the communities. Figure 3 reveals that higher median household incomes somewhat correlate to the number of monthly sales for each community. Figure 4 suggests that home values play a signifi cant role in the ability of the 55+ households to purchase a home. Results and Conclusion The four charts on this page only tell part of the story. We identifi ed the statistically signifi cant market conditions that predicted success by capturing the demographic, economic, and sales data of the client and competitor’s communities and studying characteristics of the client’s customers. These included several conditions in the market area: specifi c balance of household ages, a
a
Fig 3. Median household income of 55+ household by market area of each community
$50,000 $55,000 $60,000 $65,000 $70,000 $75,000 $80,000 $85,000 $90,000 $95,000 $100,000
1st 2nd 3rd 4th 5th Community Built 6th 7th 8th 9th
$50,000 $70,000 $90,000 $110,000 $130,000 $150,000 $170,000 $190,000 $210,000 $230,000 $250,000
1st 2nd 3rd 4th 5th Community Built 6th 7th 8th 9th
DEVELOPMENT | 31
proportion of households with incomes within a specifi ed range, a proportion of households with home values consistent with the estimated price of the homes, an average annual growth rate of the total and target populations, and a strong home sales history in the market area. The attributes that predict a successful
community could have been identifi ed even before the fi rst community was developed by analyzing comparable communities. We can fi nd the critical elements for success by analyzing attributes of and sales performance data from 8 to 10 comparable properties relative to the conditions in their respective market areas. Benefi t
There is an opportunity for successful communities based on a predictive model that pinpoints prime locations with the demographic and economic conditions for a strong sales pace.
USA - Margaret Wylde: PHONE 800 201 1483, SKYPE: margaret.wylde EMAIL
mawylde@promatura.com
UK - Mark Jeff rey: PHONE: 0207 729 0681, SKYPE: mark_jeff rey EMAIL: mjeff
rey@promatura.com
The ProMatura Group, LLC is a strategic development company that provides research and supportive services for all phases of planning, designing, building, marketing, selling and growing creative communities.
Fig 4. Median home value by market area of each community
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