Builders Use Technology to Replace Models
Imagine buying a new house without walking through the living room, touching the counter tops or stepping out on the patio and listening to the neighborhood sounds.
A growing number of builders can.
Companies are starting to replace model homes--the decades-old way of selling houses--with digital models that allow consumers to take virtual tours on a computer screen.
Builders involved in smaller-sized projects are leading the way, such as Meeker Cos. of Irvine, which has begun marketing 13 homes in Dana Point, priced up to $1 million, with little more than CD-ROMs mailed to prospective buyers.
“It’s the future that’s here now,” said Roger Delp, a Meeker broker.
Some builders--and consumers--are skeptical.
“I don’t know if I’d be willing to put out that kind of money without seeing a finished product,” said Ed Yashar, 30, who along with his wife, Janie, is planning to buy a new home in Aliso Viejo.
The Yashars haven’t tried virtual tours, but Ed Yashar said he wants the security of seeing--in person--the home’s curb appeal and surrounding neighborhood.
“There’s nothing that takes the place of walking the floor plan, and the builder demonstrating it live,” said Jay Moss, senior vice president at Los Angeles-based KB Home, Southern California’s largest home builder.
Even so, KB Home is considering testing the concept at a 50-home site in Simi Valley. And other companies that typically put up large subdivisions, where several model homes are usually built, are experimenting with virtual models.
Floor Plans on Computer Disks
This summer K. Hovnanian Cos. of California will start work on more than 100 luxury homes at Encinitas Ranch, a master-planned community in San Diego County. The company plans to build four models, but it will also show three different floor plans on a computer disk.
The test will largely determine how the company uses electronic models in the coming years, said Nick Pappas, president of the Irvine-based division of the national home builder.
A virtual model “won’t replace the sales office, in our view, but it can replace the fully furnished model homes,” Pappas said. “To the extent that it does, and we’re able to reduce our marketing expenses, we can offer homes for less money. That would give us a competitive advantage.”
One thing going for virtual models is that consumers are becoming increasingly comfortable buying big-ticket items online, whether it’s cars or appliances.
“As Generation X buys more homes, this will happen more and more,” said Gopal Ahluwalia, research director, of the National Assn. of Home Builders, a trade group in Washington, D.C.
Stan Tolan, who is 54, said he and his wife, Shelia, walked several times through a Gardena house they intend to purchase. The couple also took an electronic tour of the home on the Internet.
“It’s almost the same, I can tell almost every detail,” said Tolan, a Harbor City resident. The main difference, of course, was the tactile feel that an actual house provides. Even so, Tolan came away a convert.
“I think I would have had enough information to know that this is the house I wanted,” he said.
Some industry executives see virtual models as complementing, not replacing, model homes. But they clearly see a future for electronic versions.
In the South Bay, among other areas of the Southland where new construction is scarce, consumers have been bidding for new homes as soon as builders put up wood frames to ensure themselves a chance at buying new homes.
Those deals often are based on paper drawings, and virtual tours that provide consumers with more detail would be helpful, said Ed Kaminsky, an agent at Starwood Realty in Manhattan Beach.
“Typically,” he said, “I’ll take a couple through there and one of them will say, ‘I have no idea what the house will look like.’ There are no walls, no windows, just boards, and they just don’t get it.
Replicating homes on computers has been tried with limited results for years. A few home builders, on the cutting edge more than a decade ago, tried software that re-created little more than a paper blueprint.
“Five years ago, virtual tours were not considered to be a viable alternative to model homes,” said Steve Ormonde, co-founder of Focus 360, a San Juan Capistrano firm that replicates housing developments on computers. “But because of advances in realism, they are now. It’s the next best thing to a model home.”
By blending together computer-generated drawings and still photographs, home builders today are creating graphic images similar to those found on top-flight home video games. Imitation models convey floor plans in richer detail than what can be gleaned paging through brochures, or hearing sales pitches, said builders.
At the site of Diamond Ridge, Meeker’s project in Dana Point, there’s little more to see than vacant lots. But turn on Meeker’s CD-ROM and viewers can see what the neighborhood is expected to look like upon completion.
Buyers can take a simulated drive past a row of luxury homes, landscaped with palm trees and flower gardens. Inside, the fireplace glows, the television flickers and the sun casts shadows through the windows.
Viewers can move through every room furnished, or with a click of the mouse, unfurnished. From the patio, an animated couple cast their gaze toward the Pacific Ocean. Sights from every vantage point are reproduced from actual photographs of sea and canyon views.
“You have to use a little imagination whether using virtual reality or a model home,” said Delp, as he guided a virtual tour from a 36-inch television in his office. “But this gives people a true visual effect of what the homes will look like.”
In some ways, virtual models are a natural progression in the digital age.
Many home buyers have been using the Internet to find agents, apply for mortgages and get listings of new and existing properties on the market. More recently, companies have been putting snapshots on the Internet that form a scaled-down virtual tour, aimed at spurring buyer’s into making personal visits.
Moreover, a number of builders, including William Lyon Homes, Taylor Woodrow Homes and KB Home, have begun auctioning units over the Internet.
Virtual tours have “become a robust tool,” said Eric Elder, a senior vice president at Calabasas-based Ryland Homes.
Around the Silicon Valley area, where competition for new units is keen, Ryland built several small communities where buyers saw virtual models.
One group of 43 detached homes in the mid-$400,000 range sold out within months. A townhome project launched in February has sold about one unit out of every four.
Elder noted that Ryland’s use of computer-drawn programs in California has led to constructing fewer models at home sites in Chicago and Charlotte, N.C.
Fewer Model Homes May Lower Costs
Throughout California, builders are using computerized tours for projects built on small or redeveloped parcels, as land in coastal counties becomes scarcer, driving up costs.
When Rutter Development of Irvine launches a project of 23 homes priced at $1 million or more later this year, the company will be constructing only one model for its Highridge at Burbank Hills project.
Compact discs will show seven other floor plans, saving the company on the cost of building, furnishing, landscaping and maintaining more models, said Dave Eadie, Rutter’s chief executive.
Moreover, consumers will be able to keep the CD.
That gives them a chance to see a computer version of day and nighttime views from the virtual model, and revisit the site without leaving home.
Another advantage of virtual models for builders is that if companies find that a particular design sells slower than others, a digital drawing can be altered more easily to reflect consumers tastes than actual models.
Robert Rivinius, chief executive of the California Building Industry Assn., a Sacramento trade group, thinks it will only be a matter of time before consumers gain comfort with virtual models.
“I think it’s here to stay,” he said.
