Local homebuilding legend Larry Webb knows a thing or two about building homes that sell. He grew John Laing Homes from a small Southern California company into one of the nation's biggest and most respected homebuilders during the late '90s and early '00s. And now he's a principal with The New Home Company, building innovative product in Orange County and the Sacramento region.
At this week's Outlook 2012 event, presented by BIASC's Orange County Chapter, Webb said he thought the industry had finally bottomed out and that better times were ahead. In fact, he said the next 12-18 months is the time to lay the groundwork for the homes that will be needed when the market truly turns upward.
To that end, Webb said there were five things builders should be doing.
1. Re-examine your product. Webb said when the Great Recession hit, "most companies tried to simplify and cut costs. There have been few examples of great architecture and planning" in recent years. But well-designed new homes are selling, such as in Irvine's Woodbury development, where more than 1,000 homes have sold.
2. Do consumer research. "I don't think you can stay in touch with your buyers enough," he said. And he challenged the largely white, middle-aged audience to remember that today's buyers in California come from many different backgrounds, adding that "there are opportunities to tap into what new people want."
3. Reassess your marketing. Not too long ago, marketing was focused on large display ads in the L.A. Times and Orange County Register. Today, fewer and fewer people look in printed newspapers for information. And he warned builders absolutely have to pay attention to Twitter, Facebook and other forms of social media. "One unhappy homeowner can cause incredible damage" by posting complaints on social media. "If we're not tuned in, we're making a tremendous mistake."
4. Recommit to the sales process. During the boom, many sales people prospered as order-takers, but today's market requires people who can engage with prospective customers. "Great salespeople make a difference," he said.
5. Rethink your management structure. Webb noted that homebuilding is the ultimate team game, but as companies grew they grew silos where vice presidents were more concerned about their teams than the organization as a whole. "Too much overhead is stupid," he declared. "The further a division president is from his buyers, the more mistakes are going to be made."
Webb said companies that keep these tips in mind "will have incredible opportunities during the next upswing."
Outlook 2012 also featured an economic forecast by Dr. Esmael Adibi of Chapman University. You can read about his thoughts here.