Clicks Not Bricks; Mobile Devices Dominate Real Estate Market

The pandemic has had a profound impact on consumer behavior that has transformed the global economy.

Catalyzed by the global pandemic, companies and consumers have been ushered into an era that prioritizes digital channels above all else. Mobile apps are the new servers, providing personal concierge services everywhere, 24/7/365. Businesses saw digital generate sales like never before. Savvy marketing executives are capitalizing on this new era of digital sales.

These changes are here to stay. As traditional sales environments reopen, consumers have shown they will continue to use mobile devices to shop digitally. Smart luxury goods and other big-ticket sellers, such as pre-construction real estate, are embracing digital sales strategies and marrying it with traditional brick and mortar environments.

Buyers have never had such mobility. The pandemic has also transformed the landscape regarding consumer behaviours regarding real estate. The number of Work from Home jobs has skyrocketed, and buyers are choosing quality of life over proximity to jobs like never before. This has resulted in strong demand for new housing in suburban, exurban and regional markets.

Just as Amazon changed consumers relationship with brick-and-mortar
stores forever, the pandemic has done the same for real estate.

A recent study by the National Association of Realtors in the US reported that 76% of all e-commerce now takes place on mobile devices.

The same study also reported that last year 75% of all home purchases in the US originated on a mobile device.

During the pandemic and the recovery period afterwards, developers discovered that buyers would purchase pre-construction real estate without a visit to the sales office.

Have marketers done enough to adjust their strategies in response to COVID-19? Or do they have blind spots that will cause them to miss the opportunity digital commerce brings in 2022?

We asked these questions recently in a series of meetings with over 20 major pre-construction developers and marketing leaders across North America. Through this research, we identified key consumer trends in a post-pandemic world that will impact how marketers allocate their budgets moving forward. This research confirms the emergence of digital sales environments as an essential source of sales in the pre-construction sales and marketing ecosystem. It also confirms the importance of the human connection in marketing strategies, and gives marketers insight into hybrid, digital, and human strategies that can future-proof marketing investments.

As the market normalizes after the pandemic bust and boom cycle, we see several significant trends emerging. These trends were also confirmed in our meetings with 20 major pre-construction developers across North America over the last month.

Here’s what we heard from these industry leaders:

• Construction costs are escalating at historic rates.
• Consequently, builders are tendering projects prior to pricing and
  presales.
• Once costs are fixed and pricing is in place, builders cannot afford to
  wait to complete a presentation center to begin selling, as the delay
  would allow construction cost increases to upset the pricing model.
• The answer to this problem is to launch sales using a Digital Sales
  Office (DSO), powered by Blackline.
• This strategy allows a launch in 8 weeks and saves up to $1 million
  in upfront cost to build the presentation center.
• This swift Go to Market sales strategy preserves the integrity of the
  construction cost and unit pricing model.
• Achieving significant pre-sales using a DSO can allow the presentation center to be financed as a part of the construction financing, which can save hundreds of thousands of dollars in the cost of financing.
• Plus, once the presentation center is ready, Blackline seamlessly
  transfers its robust DSO capabilities to the brick-and-mortar
  presentation center.
• These industry leaders told us they love the Hybrid Pre-construction
  Sales (HPS) strategy of launching with a DSO, followed by the
  completion of a presentation center.
• Builders also told us they are holding a percentage of unsold units
  as inventory, to sell later in the building cycle and therefore benefit
  from increased prices over time.
• A presentation center is perfect for supporting and enhancing the
  value of the unsold units as the project rises from the ground.
• The DSO also allows presentation center buyers to engage with the
  project prior to visiting the center in person.

We see this trend in real time in a large master planned waterfront project in Texas where our DSO is being deployed by a major Texas developer as an early-stage buyer engagement tool, to build leads and share images and stories about the community.

Three things are clear :

1.Most home purchases originate on a mobile device.

2. Digital sales environments save hundreds of thousands of dollars
and are a successful pre-construction sales strategy and preserve
pro forma and project viability.

3. A Hybrid sales strategy is the best of both worlds. Speed to market
preserves the project business model, while the presentation center
drives increased sales revenues later in the building cycle.

Contact me at mark@blacklineapp.com and let’s have a chat! I’d love to hear your feedback about this article and other market trends.