It’s Not Easy Being Small: Marketing Fewer Square Feet in the Land of More
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We have talked before about the unreasonable growth in American home sizes even as the average household size continues to decrease. We have also spoken about the need to understand houses based on performance rather than square footage. Often these conversations turn toward educating potential home buyers. Ideas like understandable metrics and car-style performance labeling [...]
We have talked before about the unreasonable growth in American home sizes even as the average household size continues to decrease. We have also spoken about the need to understand houses based on performance rather than square footage. Often these conversations turn toward educating potential home buyers. Ideas like understandable metrics and car-style performance labeling are usually suggested as a means to teach buyers about benefits of smaller, more efficient homes. The thought is that proper marketing can potentially convert home buyers, but there is a larger more difficult problem which can trump this educational effort. That problem . . . how does one assure that buyers even see your smaller home project and marketing materials when the process of looking for a home is geared to steer them away?
Prior to beginning a home search there is a decision path that potential buyers take. This path whittles home options to a manageable number. Traditionally it looks something like this . . .
- Step 1 -Price
- Step 2 – Location
- Step 3 – Square Footage
- Step 4 – Beds and Baths
Each step down this path eliminates homes that don’t match the determined criteria regardless of their potential other benefits. This is particularly problematic in the square footage category where a well designed smaller home can be eliminated before it even makes its case. Unlike price and location, which have outside factors (proximity to work, budget, etc.), square footage is almost solely a design concern, and a well designed, energy efficient 1400sf could be just as attractive as a 2000sf one. Unfortunately, the person looking for a 2000sf home is unlikely to ever see the smaller house.
One reason this problem might exist is because most real estate agents allow their clients to determine the criteria of their search. They seem to seldom offer alternatives based on their understanding of the market and home buying/ownership expertise. Real estate agents, in many cases, rely on the MLS (multiple listing service) to return search results based strictly on their client’s criteria without suggesting reasonable solutions slightly outside of their requested preferences. This means that even the most appropriate of smaller home projects don’t make it out of the mess of the MLS and in front of potential buyers.
Of course, this is not true of all agents. I’m sure there are many that do say something like, “have you considered a smaller, more energy efficient home?”, but I think those agents are still in the minority. This is not really their fault though either. It is a structural problem with our understanding of home value. The MLS itself makes it difficult to search on any criteria that consider efficiency, sustainability or design. Appraisers have to have their arms firmly twisted to take performance into consideration. Banks claim to offer energy efficient mortgages, but I’m not sure I’ve ever heard of anyone getting one. Size is still firmly in charge of the housing market.
Alright, now I know this post is a bit of a mess, but I wanted to get these thoughts out there so we could talk about them. Obviously we have some ideas about how to get our homes in front of buyers, but I want to hear yours. First though, am I right about this problem? Are good homes being ignored because they are slightly smaller? Who are the culprits behind the aversion to small? And then, how do we keep good, small homes from being ignored?
Let’s talk it out in the comments.