LGI Homes :: The New Housing Reality – A Builders Perspective

Note from the hosts:  Today’s post comes via past poster (Taggee) Jayson Gibson and from the desk of Rachel Eaton, Director of Marketing @LGIHomes.  Enjoy.  ~jb

*******

This past year has not been a kind one for many builders, what with new home sales lingering near lows not seen in decades, and many buyers—what buyers there are left in the market—opting for existing homes selling at bargain basement prices. And while the prognosis from many is that things will start to “turn around” in 2012, it seems likely that the reality that we will turn to face next year may look very different from the one we left behind us in 2007.

So we all (builders, buyers and enthusiasts alike) enter into 2012 looking for the new reality, the “new normal.” What it will be is anyone’s guess, but as a home builder we hope that it represents a re-acknowledgement of some fundamental concepts that once seemed forgotten: that buyers—at heart—just want safe, attractive and affordable places to live. In the new reality, we believe that buyers will prioritize comfortable communities in which they can enjoy simple pleasures with their partners and children, be it a day at the playground or a quick stroll along a verdant path. These buyers, these homes and these communities will be more about stability than splash, security than flash.

Are we, within our own industry, alone in our hope of what the new housing reality will look like? Perhaps. But we believe firmly that the new reality is actually a return to basics, and represents progression to a more simple yet stable way of living. Many builders may be blind to this evolving change, but then many also spent the largesse of the past decade or so seeking to create a new paradigm for home life that included luxury as standard, and emphasized excess over value. When that paradigm crumbled, many builders watched their business crumble along with it. Perhaps a return to stability is what they most need.

Sure, during the boom times business was up and we here at LGI Homes were kept busy, but the temptation was never there to stray from our roots and take up that “new housing reality.” We focused on providing value to our customers, many of whom were (and still are) first-time homebuyers. Instead, we worked to create communities in places that made it easy for our homeowners to work and play with convenience and ease. We created play parks for their kids, included lakes for the inveterate weekend fishermen. Simple concepts and amenities upon which we based quality and thoughtful construction. It was a successful formula six years ago, and it continues to be a successful formula today.

How successful? Many of our more ambitious fellow builders have seen their businesses falter over the past few years, yet the demand for LGI Homes communities has actually grown. We placed nearly 500 households into new homes last year, breaking our own quarterly sales records. To us, this makes it apparent that the fundamentals of housing—the reality of housing—never really changed. People still like value, people still like safety, people still like comfort and community.

Whether other builders begin to readjust their focus in order to accommodate what buyers truly want remains to be seen, but we think that many—whether through contemplation or through brute economic force—will be likely to recognize the new reality soon enough.

*******