Construction Trends: For Sale Market

At our sales meeting this past week I had the pleasure of spending an hour with the President of London Bay Homes, Mark Wilson. They are a Luxury Homebuilder based in Naples, FL and offer some extremely high-end single family product.

In light of this fact two interesting topics came up in the discussion that I wasn't expecting: multifamily housing and density. London Bay is diversifying into multifamily and one of the primary drivers is the accessibility of land and how municipalities are designating the uses of this land (density requirements). Another key factor for his firm is price point diversity.

Mark's message to industry vendors focused on three key areas: price, service and on time delivery. He recognizes that we are in an inflationary environment but will reconsider vendor relationships more quickly where service and support is not superior.

Here were some other key points he highlighted that might be of interest to building product manufacturers in our space:

• Specification - he (builder exec) gets directly involved with many key building product decisions
  
• Developer influence - in certain projects there are arrangements where the developer requires certain products and brands (even on appliances and energy sources). An example is Lakewood Ranch which is a master planned community near Sarasota.
• Green - there has been limited consumer interest at the high end. The consumer defines "green" in a variety of ways and until you find that out you are just stabbing in the dark. Air quality and energy efficiency are the top 2 areas. There are also legal issues cropping up around Green Marketing that need to be considered.
  
• Information - magazines are still the most favored source of info. He prefers the portability and ability to read on weekends and during air travel. He uses the internet to do research.
  

Mark was also rather bullish on the short-term construction market in both single and multifamily housing. As a relatively small, niche player he certainly challenged these days but is not under the same type of pressure as some of the larger players. He reminded us that this country is a tremendous generator of wealth when you compare to Europe and other nations. That stimulous leverage should not be underestimated.

His growth goals center around buying distressed property and diversifying by price and geography.