234 New Construction Home Buyer Trends - Qadra Evans Sep 11 2024

Greg Bray: [00:00:00] Hello everybody. And welcome to today's episode of The Home Builder Digital Marketing Podcast. I'm Greg Bray with Blue Tangerine.

Kevin Weitzel: And I'm Kevin Weitzel with OutHouse.

Greg Bray: And we are excited to have joining us today, Qadra Evans. Qadra is the Director of Industry Relations and Sales for Zillow New Construction. Welcome, Qadra. Thanks for being with us.

Qadra Evans: Thank you so much for having me.

Greg Bray: Well, Qadra, for those who haven't had a chance to meet you yet, please give us that quick kind of overview and introduction and tell us a little bit about yourself.

Qadra Evans: Yeah. Well, you got the title. That's a long one. So, we'll save you the space. I direct industry relations and sales and [00:01:00] industry relations is kind of the convoluted piece of that. People are like, what does that mean? Basically, I'm kind of the exterior or external face of Zillow New Construction. So, you'll see me at conferences, lots of them. I do a lot of speaking on stage. We like to bring Zillow data and insights to the masses. And so, that's pretty much what I'm charged with. We work a lot with partnerships and building those relationships with other industry partners.

Kevin Weitzel: I'd like to see your business card to see how all that stuff fits on there because that'd be insane. I don't think there's a small enough font to make that happen. But anyway, I digress. Please tell us something interesting about yourself that has nothing to do with work or the home building industry, so our listeners can learn a little bit more about you.

Qadra Evans: So, I am a major traveler and I'm an animal lover. So, my favorite trips are those where I get to go see wildlife around the world. Africa is my favorite spot. I've been to Africa five, six times, and we like to go like every other year so that I can get my animal fix. I'm kind of a travel [00:02:00] junkie and like to see as many places as I possibly can. Try never to go to the same place twice.

Kevin Weitzel: I spent a year and a half in Africa, and I can promise you that Eastern Africa is nothing but camels. If you go to like Ethiopia, Djibouti, Somalia, and you think you're gonna see African animals, nope. You're gonna see a mess load of camels and some donkeys. That's about it.

Qadra Evans: You gotta pick your spots, Kevin.

Kevin Weitzel: You do. You gotta pick it right.

Greg Bray: I think Kevin has told us before he did not get to pick his spots. He was voluntold where to go.

Kevin Weitzel: The Marine Corps does definitely tells you where you're going to go, and they were never vacation spots, always the armpits of the earth.

Greg Bray: Well, Qadra, I think Zillow is a household name now, but tell us a little bit more about the new construction group and the services you're providing for builders, and the kinds of things you offer.

Qadra Evans: Yeah, I think Zillow New Construction has kind of flown under the radar. We're about a nine-year-old business, and what it kind of stemmed from is builders' biggest competition is not other builders, it's resale. And so, what better way to [00:03:00] capture the eyeballs of those resale buyers than to display your specs and your plans and your communities alongside those? The MLS is one way that you can get your new construction listings to the masses, but it's not the best way because the MLS wasn't really built for new construction.

So, what Zillow allows you to do is build out your community pages, showcase your specs, your coming soon, your available plans that you build, and sometimes even your lots, if you've got some vacant lots. And so, we allow you to kind of display all the goodness of new construction for those buyers. And it displays alongside resale, so you just get that enhanced marketing ability.

Greg Bray: I think that every builder should be considering how they can take advantage of that because you guys have so many eyeballs on the website. And like you said, recognizing that resale is the key competitor when you look at the total number of sales in the market and how many are resale versus new construction. Or as we like to say, used homes, right? We can say that here.

But today, we don't want to dig in too deep into [00:04:00] that side. What we're really after is more insights on that 2024 Consumer Housing Trends Report that you guys put together. Now, you've been doing this for several years. You know, before we dive into this year's report, tell us a little bit about why this report is important to you guys, what kind of started it, and some of the goals that you had putting it together.

Qadra Evans: So, really, we serve all sorts of different masters here at Zillow. We've got agents, we've got builders, but we also serve consumers, and that's our number one concern. That's why we do everything at Zillow is we have a core value that says consumers are our North Star. So, everything we build is for consumers. So, what better way to deliver what consumers want than to learn about what they want? And so, the survey was kind of born out of that.

And then, what we use it for is to educate builders and agents and lenders and all of these industry players that are sharing these consumers with us. How do we level them up so that we're all giving consumers the best experience that they possibly can? So, the report was kind of born out of that. It [00:05:00] started as this one huge report of buyers, sellers, and renters, and we still have that. And then, we survey about 9,500, maybe 10,000 buyers, sellers, renters, just to learn their habits, what they want when they're shopping, what they're looking for once they get to a sales center or to talk to an agent, all of those kinds of goodies.

And then, what we learned through doing this survey for many, many years is that new construction buyers are different. And so, about four years ago, we split off new construction from the big report of buyers, sellers, and renters and we created our own new construction mini-book. And it tracks 2,500 buyers of new construction within the past two years. And we are learning about how they shop, what they're looking for, what draws them to builders, what draws them to listings online, and then we can help guide builders to give these buyers of new construction what they want.

Greg Bray: All right. So you said new construction buyers are different. Sometimes people use different as a polite way to say, [00:06:00] strange, and sometimes it's a good thing. Different can be good, right? There's some tagline out there about that. So, when you say different, what do you mean? Why are new construction buyers different?

Qadra Evans: They're wanting different things, and they have to shop differently because new construction isn't something that they can always see, touch, feel, go into, so they're shopping differently. And they want different things when they're buying a new construction home. Maybe they're looking for something they can completely customize. They want to put their own stamp on this home. There's some reason that they're drawn to new construction over a used home. And so, that's what we wanted to learn through doing these surveys is what do they want and how do we get them what they want.

Greg Bray: All right. Now, one of my favorite pieces of data, Kevin, I don't know if you saw this in there, is that the number one. No, it's not. I'm just kidding. It's not the number one, but pets are like driving homebuyer purchase decisions. We used to always talk about which spouse is got more influence and now it's like the pet dog, it's got all this influence on the purchase decision. Did you see that data? I was fascinated by [00:07:00] that. Tell us a little more about the pets, Qadra, because that jumped out at me as something really interesting.

Qadra Evans: Yeah, as an animal lover, I really loved that we dug into this so much this year. But pets are just their family members. If you have pets, you understand. I've got three and they are children to me. And so, I do make decisions around, you know, is there room for the dog to run around? Is the fence high enough that he's not going to escape by jumping over the fence?

Are there dog-friendly community features? Is there a dog park or is there a dog run? Does the garage have a dog washing station? That could be cool. Pets are really starting to drive decisions just as much as kids do. So I think it's, I think it's a really fun thing for us to start tracking.

Kevin Weitzel: And how many communities do you know across the country that consider the dogs, but how many of them consider fish? Do you have any of them that have like fish walking stations? Or, you know, make sure that the electricity will guarantee that there'll be backups for the aquariums?

Qadra Evans: I know, darn it. Fish is just not something that we track. We know the [00:08:00] dogs are the number one pet, cats are second, and then we really, the numbers fall off after that.

Kevin Weitzel: Yeah, pretty much.

Greg Bray: Kevin has a fish.

Kevin Weitzel: I have several. I've got like five aquariums now. It's nuts.

Greg Bray: I never thought about backup generators for aquarium filters though. I mean, that's probably a good feature. Yeah, there we go. Well, thank you for sharing the pet data. Again, I think that's kind of interesting and fun. Kids versus pets, which one's more important? That's a whole nother survey. Right.

Kevin Weitzel: Actually, let me expand on that just a hair. How often do you think that buyers will make a decision based off of not wanting to own a home after a pet owner? Kind of like not wanting to own a car after a cigarette smoker. Maybe you don't want that pet dander in the carpet or you don't want any weird remnant hairs just still stuck in the house of some sort. Does that ever come into play?

Qadra Evans: I don't know we're talking about new construction so that's probably not a big concern.

Kevin Weitzel: Well, that's true. Well, I was talking about in comparison to used.

Qadra Evans: Maybe that's part of the 42 percent of people that only want new construction.

Greg Bray: That's a great segue, Qadra, [00:09:00] because, there is this interesting difference that you guys find in buyers between the ones that only want new, they're not even looking at anything but new. And then there's the ones that started out probably kind of just shopping and didn't really think about new and now they start considering it and whether they stay with new or they go back to resale. Tell us a little bit more about some of the insights about those different groups.

Qadra Evans: Yeah, so we know 42 percent of buyers want new construction only. That's fine. We can kind of cater to them, but that's the low-hanging fruit, right? Those are the buyers that we know are going to buy new construction, so we just have to be building something that appeals to them. There's 58 percent of buyers that they're probably just shopping, and think of the last few years, this housing market has been pretty wacky, and there's not a lot to choose from. And so, these buyers are looking for something that they can buy, and new construction is increasingly looking like a fabulous deal because there's things like rate buy-downs that builders can offer.

[00:10:00] Actually, Zillow just put out a new study that in many markets, new construction has become actually less expensive per square foot than resale in specific markets. So, new construction, where it used to be this thing where you might be paying a 20 percent premium on a new construction home over a used home. Those margins have started to shrink and new construction is really a viable option, especially when you think of how much easier it is to work with builders, all the advantages that they have overused homes, just given our recent market and all the noise that we're facing there.

Greg Bray: When you talk to builders about some of these stats and differences, do you feel like builders really are doing the best they can to teach people the advantages of new versus used, or they just kind of assume that they're here because they're here and they must know that?

Qadra Evans: As much as I want to give builders the benefit of the doubt because I think they should try to get this across to buyers. I think we can all do a better job of educating buyers on the advantages of new construction. If you think about all [00:11:00] the advantages that builders offer as far as promotions or incentives, I don't think we do a great job of educating buyers on what that actually means for them either. If you're talking about rate buy-downs, a lot of buyers don't have any idea what that means. So, if you can show them what that does for their bottom line, then the dots start connecting, and they're like, dang, this really is a good option for me.

Greg Bray: I mean, just like Kevin was talking about, nobody else's pet stuff is in this house because it's new. It's not just about rate buy-downs. It's about the latest energy efficiency stuff. It's about materials. It's about warranties. It's about the styles that are new as opposed to that thing that was in the seventies that nobody wants to admit whatever happened.

Kevin Weitzel: There's also simple things like just air breathability, air quality, you know, with net zero homes and air filtration systems of modern new builds. It's far superior to like what I have in my 1980 townhouse, you know.

Qadra Evans: That's right. And I think it's really important to just learn what that one buyer, what makes them tick. Maybe [00:12:00] they're very concerned about the air quality in their home, but maybe somebody else is very concerned about energy efficiency, or I want this smart home technology. So, it's really about learning what that specific buyer is looking for and making sure you're appealing to them.

Greg Bray: Hey, everybody. This is Greg from Blue Tangerine. And I just wanted to personally invite you to join Kevin and me at the upcoming Home Builder Digital Marketing Summit. It's going to be October 23rd and 24th in Raleigh, North Carolina. You do not want to miss this. We're going to have marketing education. We're going to have online sales counselor education. We're going to have networking, round table discussions, and of course, a whole lot of fun. So, make sure you get registered today and join us. You can get all the details at buildermarketingsummit.com. Can't wait to see you there.

And I just want to say to our listeners that we've been talking about a lot of statistics because it's in this report. We will tell you how to get the report. Sometimes it's hard to hear numbers and remember them when we're just [00:13:00] talking about them and throwing them around. We'll give you a link in the show notes and make sure we tell you before we're done where to go get the report if you haven't seen it yet.

So, Qadra, you were talking about new home buyers shopping differently, and a lot of that has to do with the fact that the product doesn't always exist yet in a physical form that they can go look at. What are some of the insights that you guys asked about and learned about what it is they find helpful in that shopping process?

Qadra Evans: I think of all the time that you could waste getting in your car, driving to a new home community, and then you learn that that floor plan just isn't even going to work for what you need. Think about all the time wasted doing that. And so, what buyers are telling us is help us understand what the house is going to look like before we take those steps before we waste our time, and we'll waste a lot less time and we're going to be a lot happier and have a customer at the end. Right?

So, 3D tours are something that we've just seen. It kind of peaked during COVID, the demand and the desire to have those 3D [00:14:00] tours on listings. And that demand hasn't gone anywhere, it's just increased from there. You want to be able to take a virtual step inside this home, walk around. Maybe you can click through the still photos in each room to get a better sense of what it's going to look like.

So, 3D tours are something that they're demanding. Our data shows that they're getting 68 percent more views, 36 percent more saves when there is a 3D tour attached on a Zillow listing. So, the efforts are not in vain. Buyers want it. They're clicking through to see it. And it hasn't gone anywhere as far as trends that we're seeing.

And other big one that I happen to think is some of the coolest technology that really came, it was fast track during COVID is interactive floor plans. So, you can actually plug yourself into a floor plan, walk around that house, and get a sense for what that house is going to feel like whether it's built or not. And so those are things that we've seen just skyrocket in demand since the pandemic.

By the way, we reference the pandemic a lot because it changed a lot of [00:15:00] things. That's also when we broke apart this new construction mini-book in the Consumer Housing Trends Report. So, kind of timely, and we've just been able to watch those trends grow in their favor.

Greg Bray: So, we know that people want these things, are builders creating them? Are they using them? Or are you guys looking at these listings going, gosh, only a small number of builders are actually really engaging with these tools.

Qadra Evans: I wish that I could say more builders were adopting this technology. Zillow has this technology. You can shoot it yourself on your phone for free. Or we have a whole media service that you can purchase that gets these tools in the hands of builders as well. And it's just not getting the adoption that we'd like to see. So, I feel like a broken record sometimes because I go out and I talk about all this great stuff that you can take advantage of. Please put 3D tours on your listings. Put interactive floor plans on your listings. The engagement numbers skyrocket. You're really providing the customer experience that customers want.

Greg Bray: I may be misremembering, but I believe [00:16:00] it was you that at one point, I heard a presentation where you were talking about just the difference in the number of photos that builders put on plans versus the resale listings. Do you remember that number off the top, that difference?

Qadra Evans: I don't know if I remember the number off the top, but I think of my own personal experience when I look at new construction online, and maybe you get a picture of a dirt lot, and maybe a house is in framing stage and that's horrible experience. And so, the sweet spot I do know is about 30 photos. Buyers want to see about 30 photos. They don't need more than that because then you're just overloading the brain, right? But 30 photos, it really can give buyers a sense of what the house looks like inside and out, top floor to basement. And it gives them a sense of what they're going to be walking into when they get to your sales center.

Greg Bray: I don't see very many builders on their websites or on their listings that have that many photos of a given single home. I mean, Kevin, what's been your experience on photo count when you're looking around?

Kevin Weitzel: You know, yeah, I researched builders, obviously selling the builders all the time. I research them all the time. And I see real common where they have a [00:17:00] gallery page that is not specifically, one plan that has X number of images. It's just a spattering of images that are just like, here's some of the beautiful things that we can create versus here's the X, Y, Z plan, and here's the 25 different photos of it. We never see that. It is very rare. It's usually five, 10 images at best.

Qadra Evans: Yeah, it's tough. And I think the lifestyle photos do a great job of kind of getting across what the community is going to feel like too. And so, you can use those as part of your 30, but just make sure that you're really giving buyers a sense of something that they can't necessarily walk into.

Greg Bray: So, Qadra, as you guys have been doing this report now for a few years, are there some key trends like from last year to this year that jumped out at you guys that you went, wow, that's interesting that that changed, or we didn't expect it to change or thank goodness it's finally changing? What are some of those insights?

Qadra Evans: Yeah, I think, one of the ones that comes to mind is the demand for smart home technology in these homes, which is also a huge advantage [00:18:00] that builders have is it's a lot easier to start building this stuff from the ground up than it is to retrofit an older home. So, smart home technology, we've seen, like, a 68 percent jump in the demand for this technology.

Now, what I hope that next year's Consumer Housing Trends Report brings out is, what kind of smart home technology are people really looking for because we haven't gotten a chance to dig into that yet. Smart home means different things to different people. Maybe it's security. Maybe it's lighting. Who knows? It could mean lots of different things. But we're going to try to dig into that to get the whole story. But definitely a trend that's just increasing significantly. I don't see it going anywhere anytime soon.

And the other one, which is interesting, and I think this has a lot to do with just the affordability crisis that we're facing, but you've got Gen Z's and millennials that are looking to supplement parts of their monthly payments. And so, when they're starting their home search, looking to see if this house has the capability to rent out part of it, maybe it's got an ADU, but is there a way that I can supplement [00:19:00] my income to help make these payments a little bit more comfortable? So, that's a trend that we've really started to see take off in the last couple of years.

Kevin Weitzel: So, what you're saying is that the Tony Stark world where you have a computer screen that just floats out in the middle of space that you can just move things around, that kind of smart home technology is not quite here yet.

Qadra Evans: I don't know. I just think of the Jetsons when you say that, And I just want Rosie the robot to come clean my house and do my laundry.

Kevin Weitzel: They already have the Roomba, which is like self-vacuuming, self-cleaning floor cleaner, so.

Qadra Evans: It's getting there, but that Roomba does not fold my laundry.

Kevin Weitzel: Yeah, there is a lot to the Jetsons that has come true, but yes, you are absolutely correct that there are some shortcomings still to this day.

Greg Bray: And I would invite our listeners who have no idea who the Jetsons are to Google it.

 Just saying there might be a couple of you that are like, what are they talking about? Well, Qadra just when you think about all the different things that a builder could take away from this report, if you had to boil it down to just kind of one or two key action [00:20:00] items. Okay. Hey, look, you read this. We got this data. You need to be doing this or you need to think about that. What would be those one or two kind of top action items that you would recommend?

Qadra Evans: That is a fabulous question. I think it's kind of twofold. I'm going to sound like a broken record. Take advantage of the technology that is offered to you. It will only help you. Think about the more robust sales conversations you can have if you've got self-tourable homes. You can talk to buyers after they get out of that home with much more knowledge about that buyer than you have before. If a buyer is in your sales center because you had an interactive floor plan on your listing, they already know that the floor plans that you offer are likely going to work for them. How much better is that than spinning your wheels on a buyer that won't ever end up buying because it doesn't work? So, the technology is huge.

Secondly, figure out a way to educate buyers on the value of new construction. Whether that be the features that you offer or the incentives that you can offer that help them offset their monthly costs, really be [00:21:00] able to take a pen to paper or a pad to finger, whatever you're using and show them what it means for their bottom line, because only then are they really going to understand how you as a builder of new construction are offering them what they can never find with resale.

Greg Bray: So, if somebody hasn't seen this report yet, where can they go and find a copy?

Qadra Evans: So, if you want the big, big report, you can just Google, Zillow 2024 Consumer Housing Trends Report. You're going to get that huge one that has buyers, sellers, renters, all the information you could ever want. For the new construction-specific mini book, which is my favorite one, you can just Google, Zillow New Construction Consumer Housing Trends Report. It's going to take you to a place where you can download the full report.

Greg Bray: Well, I think that the data you guys have been providing is really helpful, really insightful. Always look forward to looking through it and trying to see, you know, some of those trends every year. So, thank you for the efforts you guys put into that. Pass that along to all the research people that do all the hard work and draw the pretty graphs and everything [00:22:00] that go along with it. Qadra, any last thoughts or words of advice you wanted to leave with our listeners today before we finish up?

Qadra Evans: I would, but I think I'd sound like even more of a broken record. Uh, just keep up with the trends and make sure that at the end of the day, you're doing what you do for the consumer. Then we all win because we're operating the exact same way.

Greg Bray: Qadra, if somebody wants to connect with you, what's the best way for them to get in touch and reach out?

Qadra Evans: You can find me anywhere. LinkedIn, you can email me. I'll make sure that Greg has the email address that you can reach out to me on. You can reach out to newconir@zillow.com and that'll get right to me. Pigeon Carrier, any other way that you want to get in touch? It's not hard.

Greg Bray: You might be our first guest who offered carrier pigeon as an option.

Kevin Weitzel: And I doubt that they're even going to get there with three pets.

Qadra Evans: Yeah. Right.

Greg Bray: Well, thanks again, Qadra, for spending some time with us today. And thank you everybody for listening to The Home Builder Digital Marketing Podcast. I'm Greg Bray with Blue Tangerine. [00:23:00]

Kevin Weitzel: And I'm Kevin Weitzel with OutHouse. Thank you.