Tuesday, July 20, 2010

My interview with the Mortgage Calculator Blog

Recently, I was asked by Adam Kritzer of the Mortgage Calculator Blog to participate in a Q&A-type interview. That interview was just posted, and you can find it here. An excerpt:

Mortgage Calculator
: It seems both the housing bubble and its bursting have been characterized by important regional disparities, so it’s not really meaningful to make generalizations on a national basis. Do you think that the recovery, whenever it cements itself, will also adhere to this pattern?

Absolutely. The areas to recover the first will be those that didn’t participate in the bubble in the first place, states like Texas or parts of the mid-West that still have sound economies. The next areas to recover will be those that did have price run-ups but also have relatively strong economies and have barriers to more building, which are mostly located along the coasts with the exception of Florida, which is a basket case unto itself.

What will take longer to recover are areas popular for vacation homes and those markets that have served as bedroom communities for larger job centers in places like Los Angeles or the Bay Area and require a commute. Here in California, that means the Central Valley, the low and high desert areas and much of the Inland Empire.

Thursday, July 15, 2010

Green Building Success Requires Proper Execution: Education and Customer Service are Critical

Recently, I walked into a retail store to pick up a bottle of wine for a party. And yet despite the enormous selection provided by this national chain, the line was so long – and the store so chronically under-staffed – that I immediately went somewhere else. That visit reminded me that even if a company offers great products and selection, if they drop the ball on execution, they risk losing customers.

For the building industry, given the complexity of marketing, merchandising and selling the benefits of sustainability and green technology, education during the sales process and customer service after the closing are critical components that not all builders provide.

To this day, I still remember walking through models in the late 1990s when builders were trying to showcase options such as home theater systems, whole-house audio and structured wiring. And yet more often that not, I’d see TV sets flashing a “signal missing” message, fake computer monitors, sales agents who could only refer my questions to an outside vendor, and brochures that gave only a passing glance on these new features.

Fortunately, builders such as Pulte Homes have clearly improved on that history, and now feature a Quality Construction Center as part of the sales complex in some communities. Inside one of these centers in Las Vegas, the builder provides three-dimensional displays comparing Pulte construction techniques versus what the code dictates. For example, potential buyers can feel how well low-e glass holds back the desert summer heat while dual thermometers compare differences between the air-conditioned center and the attic above, thereby showcasing how much better cellulose insulation works when stapled to the roof struts as opposed to the ceiling deck.

And, since the best HVAC systems are only as good as the quality of the installation, Pulte hires independent inspectors to conduct critical duct tests and visual inspections before any sheet rock is installed. Other green features include a right-sized 15 SEER HVAC system (which is matched to the size of the home so it operates at peak efficiency instead of constantly cycling on and off), pressure balancing between rooms to avoid hot and cold spots, and a focus on ensuring the entire exterior is sealed to avoid the loss of conditioned air.

For skittish customers not entirely convinced of green building techniques, Pulte also offers a guarantee through its Environments for Living (EFL) package, which promises that savings on heating and cooling bills will live up to their promises. Started by MASCO in 2001 and now offered on all area homes built by Pulte, the program provides a framework for green building that often frequently exceeds traditional Energy Star® standards.

For potential buyers not able to make it to the model complex, Pardee Homes has created a separate area on its Web site which showcases green building features related to solar power, engineered wood, carpet recycled from plastic soda bottles and low-VOC paint. Building green isn’t new for Pardee, which built the first Energy Star®-branded home in 1998, launched its own LivingSmart program in 2001 and last year committed to building 100% green homes in all future communities. For customers already living in these green homes, forward-thinking builders have also beefed up their customer service departments with additional training and out-sourcing to experts when appropriate.

Finally, since any chain is only as good as its weakest link, in 2007 Pulte launched its internal Green Team. Reporting to senior management, the team’s role is to stay on the cutting edge of green building products and practices, review divisional performance, stay on top of new legislation and ensure that new initiatives fit overall corporate strategy.

July column for Builder & Developer magazine now online

My monthly column for the July issue of Builder & Developer magazine is now online. In this article, entitled "Gold Nugget Winners Evolve," I discuss how the demand for smaller and more energy-efficient homes has returned some builders to their roots as artisans and not just providers of commodities. You can read the entire article by clicking here.

An excerpt:

For months we’ve been reading and hearing about how builders have been downsizing both the size and specification levels of the homes they build to cater to today’s more frugal buyers. In the first stage of that transformation, it was a practical move, and often catered more to function than form.

But now that industry architects and building pros have become more comfortable with homes that are smaller yet also more affordable, urban-oriented yet energy efficient, these second-stage homes are showing the type of creativity that win awards.

At the 2010 Gold Nugget Awards this past June, however, the winners demonstrated that only the right combination of form and function will ultimately win the accolades of the most important judges – the buyers...