You hear a lot about interest rates freezing people out of the real estate market. But with five one-ton blocks of ice, Kaufman & Broad, a major home builder based in Los Angeles, hoped to illustrate that financing may not have all that much to do with home buying.
Employing a little shameless gimmickry, Kaufman & Broad staged a recent competition among five local ice sculptors to re-create frozen miniatures of the model homes of a new housing development in Anaheim. The more detailed the ice houses, the better.
What K&B;, along with a growing number of builders, has discovered is that, when it comes to house hunting, first-time, upscale buyers don't really want to talk about financing or square footage, two givens in the industry. They want to talk about features.
That was the "overwhelming" evidence of a recent marketing study commissioned by K&B;, according to Vice President Jana Waring Greer. The study, conducted by an independent research firm, showed that such goodies as wood-burning fireplaces, atriums, ceramic tile, gabled roofs and bay windows were all high on the home hunters' lists.
These "key motivators" and "hot buttons," as K&B; describes them, "were even more important than specific financing plans, square footage and a host of other factors considered paramount by the home building industry," the company said.
"These (features) aren't novel things, but you don't find them in the first-time home-buyer market," Greer added.
K & B's new California Crest in Anaheim is the first of a series of single-family-home developments. The umbrella name "California Series" will be used this year at 32 similar developments throughout the state, K & B said, and may represent as much as $2 billion in new housing by the end of the decade.
Prices range from about $64,000 for a two-bedroom, one-story model to $160,000 for a split-level, four-bedroom home. What's more, the feature-packed houses--like Japanese cars--are "down-sized." The square footage ranges from 800 to 1,500, with one four-bedroom model packed into 1,300 square feet, Greer said.
The loaded, down-sized homes fit into a whole trend in housing, said analyst Johanna Loevenich of Bateman Eichler, Hill Richards in Los Angeles. "Packing those smaller homes with nicer things helps sell them," she said. "People aren't expecting size anymore. They're having smaller families, later families" and don't need larger, more traditional homes.
"For K & B it's a pretty viable strategy," Loevenich added.
The winner of the ice competition, incidentally, was Takehiko Yoshioka, whose 1,800-pound rendering was judged to be most faithful to K&B;'s tiled roof, gabled windows, stonework and bay windows. Yoshioka, executive chef at the Bel-Air Bay Club in Pacific Palisades, walked away with a cool $1,500.