One of the first things you learn in Marketing 101 is that the most important part of a successful marketing campaign is “Location, Location, Location”. 

If you watch Donald Trump’s Apprentice shows, you also learn that whenever he has a remote sales challenge, he really questions the contestants’ choice of location even if they do not really know New York City very well.  That is because he knows that location in a real estate development, what the contestants will ultimately be hired to work on, is key. 

But with the market plunge in Florida, the key elements of location that determine site selection are much different than they used to be.

It used to be that you would just figure that the closer you were to the beach, the better your project was.  Most listings said, “Walk to the Beach” or “Minutes to the Beach“.

People buying in South Florida didn’t get the boom in Weston, Florida because it was so far from the water… unless you count the Everglades!

Well, now with the overbuilding on the coasts hurting the markets so badly throughout the state, developers have changed their tactics and have started really put the elements “Location” under a microscope.

The element of Location that equates to “Walk to the Beach” is simply Geography.  People that are moving to retire to Florida think beach. They want to grow old with the sand between their toes…searching for their lost shaker of salt.

That’s fine… if you just look at a map of Florida, you’ll see that there’s plenty of beachfront property.

But now that the big markets like Miami, West Palm Beach, Naples, Fort Myers, and Tampa Florida are all suffering the woes of too many condominium high-rises and way too many new single family homes in the $350,000+ range, the map isn’t the single most important indicator of where to build.

The elements of Location that developers are now looking at are Demographics and Psychographics.

Demographics – this is the analysis of key personal information about a population from gender to income to age to education and more.

Demographics let you more closer target via data, not just water features, where your product will be most likely to succeed. 

When using demographics, the “Location” is in the data.

Example: You don’t put a Neiman-Marcus store in an area where the average annual income for 25 miles is $35,000 and under.  There just aren’t enough luxury shoppers to support the product mix of such a store.

Psychographics – this is the analysis of key personality traits.  Interests, Attitudes and Opinions are “measured”.

The essence of Psychographics are the population’s “Tastes and Preferences”.   People in certain areas of the country prefer certain things prepared, served, packaged and presented in certain ways because that’s just how they had it growing up.

The age old Example of psychographics was that you don’t open a Toyota Dealership in Detroit.  Motor City and its union employee base would be hostile to and reject the competition’s product. 

This isn’t because of proximity to the US Auto Makers facilities.  Instead it is about the pride of the workers and the UAW being in their blood. 

Another example is that in Chicago, you don’t put ketchup on a hot dog… nor do you boil them.  You grill or “char” them and put mustard.  It is just part of the societal norms.

So what does this have to do with the price of tea in China?

Florida Real Estate Professionals are now having to analyze the customers before the product.  They used to be able to sell anything in 30 days no matter where it was.  Now they have to figure out where to place the product, not how to draw the customers to the product.

This type of marketing is normal in most product marketing but many Florida Real Estate people have forgotten how to do market research prior to launching a marketing campaign.   Developers, too, are learning that there are areas of Florida that are more apt to accept their product and thereby more likely to buy it.

Lenders have not necessarily caught on.  They’re on this “Market” trend that Florida is a no-no.  They haven’t caught on that there are micro-markets that will support growth.  There are areas like Sebring Florida that have become hot despite being away from the beaches.

Why is Sebring Florida, home of the Sebring International Raceway, a new hot spot for developers?  Because they have a need for housing.  The people there do not have a lot of options.

Even though growth in Sebring Florida is not as rapid as many other areas in Florida, it exceeds saleable inventory!  Hmm… that is a demographic measure that is quantifiable if I ever saw one!

Another thing about Sebring Florida is that people are used to the older housing that exists…. but they see that their neighbors in bigger cities get amenities with their property so building a shiny new development there with upgrades that they can still afford is a great feature.

The existing homes can and have been upgraded in many cases… but having a freshness to the entire area is a novel thing to Sebring Florida residents.

So you see that Lenders that do not see past the “Market” in Florida are missing the opportunity that exists in cities like Sebring Florida where new housing is needed (demographics) and desired (psychograhics).

If an area wants and needs a product… why would it be a bad idea or even a risk to give it to them?

More Real Estate Industry News You Can Use from
David A. Podgursky, MBA
The Mortgage Go To Guy!
Your Source for Residential and Commercial Mortgage Loans in Florida