Most builders already know that data from the National Association of Realtors show that more than 50 percent of buyers use the Internet "frequently" as part of their home search. But a new NAHB study digs a little deeper to find out exactly where and how buyers are using the Web. The most remarkable finding is that there is a huge disconnect between actual consumer behavior and builders' perceptions of buyers' behavior. In a nutshell, most builders are way off in their analysis of how buyers are using the Internet to find a new home.
The joint study was completed in November 2005 by the National Association of Home Builders' Institute of Residential Marketing and Homebuilder.com. More than 1,000 homebuyers who had purchased a newly built home in the previous 12 months were surveyed, along with 186 custom and production homebuilders.
The way builders continue to underestimate the power of the Web is mind-boggling. For example, homebuyers list Web sites (27 percent), signage (27 percent) and Internet listing services (26 percent) as their top three ways to look for a new home. However, when builders are asked how homebuyers find a newly constructed home, they list signage, ads in newspapers/home magazines and Realtor promotions as the top three ways.
Other underestimates or disconnect gaps between consumers and builders:
- 25 percent of homebuyers found their homes on builder Web sites, but builders estimate that only 18 percent of buyers find homes using the builder's site.
- 25 percent of homebuyers found their home using an online listing service, but builders estimate that only 11 percent of buyers find a home using an online listing service.
- Builders allocate just one-fifth of their marketing budgets to online resources, even though buyers readily admit that 50 percent of their home quest is conducted online. Even more illogical, builders report that they plan to significantly increase marketing expenditures on traditional media such as newspapers during this market slowdown, but they plan to only marginally increase online marketing expenditures.
Other interesting data of note:
- When asked where they would start their next home-buying search, consumers report they would use an online listing service first (28 percent), a Realtor second (24 percent), and a builder's Web site third (13 percent).
- Six in 10 buyers use keyword searches online when seeking a home.
- The most-used online listing services are Realtor.com, HomeBuilder.com, Newhomes.com and iNest.com.
- Buyers cite information gathered on builders' Web sites and Internet listing services as the "most useful information resource" in their home-buying search. They also say the depth of information is not only useful, but provides them with comfort and satisfaction during their search.
This study should be an eye opener. Clearly, the time to devote marketing dollars and signifi- cant effort to the Web is long overdue.
What are you already doing? Let me know.