Does a shaky housing market change how shoppers look for new homes? We decided to buzz Paula Sonkin, real estate executive director at consumer-satisfaction trackers J.D. Power and Associates. J.D. Power just finished its 2006 survey (to read the national study, CLICK HERE or for the O.C. results CLICK HERE) so we figured she’d have a good pulse of the market.
Q. How does Orange County’s new-home shopper differ from other buyers you talk to?
A. Homebuyers in O.C. report among the highest levels of customer satisfaction in the country. Or, you could also say, builders in O.C. provide higher levels of satisfaction than in most other areas of the country. O.C. ranks fourth of 34 markets. Whereas the O.C. market average score (122 out of a theorhetical 166 perfect score) stayed the same as last year, and the national average (112) stayed the same as last year, (the O.C.) ranking went down from 1 of 30 to 4 of 34, due to the change in other markets.
Q. Obviously we’re having a national housing slowdown. Did the buyers you talk to seem to be acting any differently this year than in the past?
A. Customer satisfaction is a function of performance minus expectations. In order to receive higher levels of satisfaction, builders need to exceed the expectations they set for their buyers. In a downturn, this is even more evident. Builders providing high levels of satisfaction will be able to differentiate themselves from their competitors. Builders have in past years been in more of an order-taking mode, than in a selling mode. Now, salespeople have to negotiate. And homebuyers now know that builders are in a position to negotiate on price and options.
Q. Were those differences more pronounced in any geographic region? Or in any price range of the buyer?
A. Market scores range from Austin (124) to Philadelphia (95). Price of home does not correlate to satisfaction. We consistently see high and low satisfaction across price ranges.
Q. Does potential for home appreciation play into a buyer’s sense of satisfaction?
A. You’re asking are homebuyers less satisfied if they feel the potential for home appreciation is less, as in the current down industry? We limit our study to original home residents, as such, avoiding investors. So the basic answer is no, I don’t think this has an impact. Conversely, when homes were appreciating very rapidly, there were still builders with very low satisfaction even though their homebuyers had high appreciation on their homes.
Q. You talked of sellers in a tough market having to push customer satisfaction. What “extras” — service or add-on — are buyers saying they are looking for?
A. Based on our study, builders would be best off to first focus on what drives customer satisfaction from the customer’s point of view. In terms of our study, warranty customer service and home readiness. Warranty customer service is defined primarily as solving warranty problems on time and cleanliness of warranty work. Delivering complete homes, on time, is also crucial. All highest ranking builders in our study deliver a high percentage of on-time, complete homes. Lowest ranking builders do not.
Q. Doesn’t price play a big role in these kind of markets too?
A. As I mentioned above, we see no correlation between price and satisfaction. Across all markets, we see high and low satisfaction across all price homes. Goes back to performance minus expectations.
How can you ’see no correlation between satifaction and price’ ? I think that’s impossible
Non sequitur post.
Were you guys even on the same planet when the interview occured?
She sidestepped every single question?
Was that frustrating for you Jon?
does price play a big role in…
no of course not most buyers today are in what
appears to be a drug induced stupor- they havent
a clue as to what their getting into– so yes
they do appear happy–
Everything is JUST GREAT. Thanks I was getting worried I may lose $200k IN MY home I just bought last year. I already lost $100k and can’t refi. I am just so happy!
After re-reading her interview and looking at her photo, it dawned on me. That’s the same smile that Alfred E. Newman had on the cover of MAD magazine with the caption “What, me worry?”
I think even he would find a correlation between price and satisfaction.
Check out this article. What a joke!
Maybe we should all start a trust fund and donate money for RE agents so that can make it through the tough times coming up.
I certainly didn’t hear about them cutting their commissions when selling a home was as easy as making some microwave popcorn.
90% of the posts here come from the same people over and over.
Maybe an article in the regular “paper” about the blog itself would entice more people to participate. More folks would make it more interesting. As it stands, the blog appears to be a soapbox for half a dozen people. It is not out of the ordinary for the same people to post multiple times on the same topic.
You have done a great job with providing articles that come from every possible perspective. The blog can only get better with more readers contributing.