Credit: Fred Forbes
When developers Roger Mumford and Clay Bonny were drawing up the plans for River Place, a mixed-use enclave of 68 townhomes in the suburbs outside Manhattan, they had a hunch their best prospects would be young, first-time home buyers, given that the stagnant resale market was making it difficult for empty-nesters to unload their existing homes and downsize. They were right. And with a shrewd sales strategy, they sold more than 65 percent of the units within five months of the project’s grand opening.
A heavy emphasis on model merchandising was central to the frenetic success of River Place, which is located in a mostly blue-collar county on the site of a former silicon factory in Butler, N.J. “We knew it wasn’t enough to just talk about our building company and the quality of our products,” says Mumford. “We needed to execute so people would have something they could experience first hand. They needed to know exactly what we were offering in the face of what was clearly a deteriorating market.”
That’s when interior designer Mary Cook was brought on board to create three furnished models reflecting the lifestyle needs of three imaginary buyers. The contemporary, neutral-toned Amsterdam model, for example, pictures its owner as a 34-year-old divorced, single guy who works full time as a personal fitness trainer while pursuing a business degree on the weekends. The Freeport model imagines its inhabitants as a couple—both divorced and remarried—who met in culinary school, with one working as a sous chef in an upscale restaurant and the other running a catering business from home. In this case, a study off the kitchen serves as a home office, while a second bedroom is set up for weekend visits from the child of a previous marriage.
Credit: Fred Forbes
And then there’s the Chelsea model, staged as a “mingles” unit for two sisters in their 30s—one a jewelry and textile designer, the other a high school math teacher—opting to buy and build equity together. Blond wood tones, radiant textures, and eclectic furnishings give this space a worldly, urban vibe. “In a first-time market, many buyers now have a roommate situation, or they are pooling their financial resources to buy a larger place together, so this was a very realistic scenario,” Cook says.
Having three fully furnished models for a property of only 68 units is unusual, Mumford concedes, but the experiential sales strategy, tied in with Internet and newspaper advertising and targeted direct mail, proved to be money in the bank. Curious visitors touring the models were dazzled to discover that standard features include oak stair treads, 42-inch staggered-height kitchen cabinets, two-tone designer paint themes, whirlpool tubs, oversized showers with Corian seating, built-in breakfast bars, and granite countertops.
Credit: Fred Forbes
The deal-closer was the price tag—which has been averaging around $325,000. Rather than shooting high and later resorting to gimmicks and discounts to move inventory, the developers realistically predicted where the market was likely to be six months from their kickoff date and downscaled their up-front pricing accordingly.
“We saw the world collapsing around us with people very nervous about their builders going under, and we needed to create an island of stability,” Mumford says. “This project has not been characterized by a litany of cascading prices, so our buyers feel their investment is secure.”
Well, almost. “We did have one model that we dropped the price on by about $15,000 early on,” he concedes. “At the time, we had three buyers of that model who had already signed contracts, so we had our sales manager call and tell them we were making an adjustment to their contract price on good faith, even though we were not contractually obligated to do so. We were afraid people might be spooked by that, but it actually had the opposite effect and spurred a wave of referrals. I guess people saw it as a very forthright way to run a business, and they appreciated that.”
In fact, eight of the units sold thus far are the result of referrals. In one case, a single sale led to a chain of three subsequent word-of-mouth referrals, according to sales manager Karol Johnson, who continues to see model traffic of 40 to 50 people per week. “On Super Bowl Sunday, I sold three houses before kickoff, which was nuts,” she says.
And did those fictional buyer profiles hit their mark? Bullseye. Only 15 percent of sales to date have been to couples in their 40s and 50s, whereas the remainder have sold to young professional singles or couples. In fact, the Chelsea model was snapped up, fully furnished, by a single woman in her 30s who works in New York City, Johnson says. “She loved the house and bought everything just as it was."
Community: River Place at Butler
Total acreage: 7.75
Date opened for sale: Sept. 15, 2007
Product: Two-bedroom townhomes from 1,442 square feet to 2,036 square feet
Price range: $310,000 to $425,000
Total number of units at build-out: 68
Sales to date: 64
Builder: Heartstone Development, East Hanover, N.J., and Roger Mumford, Colts Neck, N.J.
Architect: Thomas J. Brennan Architects, Plano, Texas
Interior designer: Mary Cook & Associates, Chicago