Archive for November, 2007
By Michael Corkery From The Wall Street Journal Online
Lennar Corp., for one, has joined the “not to sell” camp at its development in Orange County, Calif. The Miami company plans to finish building 259 homes — the first phase of a 1,100-unit development in Irvine — but it has decided not to sell any of them until the constrained mortgage market and swollen housing inventory improves.
“We are better off holding off on sales at this asset and not discounting as steeply as the market is discounting right now,” says Emile Haddad, Lennar’s chief investment officer, who oversees the company’s large West Coast projects. “It doesn’t make sense for us to sell it in an environment that as strained as it is right now.”
Mr. Haddad says Lennar will monitor the Orange County market on a monthly basis, but “this might be put on hold for the whole year of 2008.” Lennar also is halting development of a large community planned near Angel Stadium of Anaheim, despite preparing the land to support the project.
Analysts expect more builders to mothball projects in the coming months, as they decide that the losses from selling homes at huge discounts are greater than the costs of carrying properties on their books. But it’s not an easy decision. Builders are facing increasing pressure from lenders to service their debt and also have overhead expenses to support.
“It’s the next natural step in the evolution” of the housing downturn, says Nishu Sood, a home-builder analyst at Deutsche Bank. “This normally happens during a recession when you just don’t have a base of demand. But it’s like that now. In some of these locations, you just can’t give a house away.”
Some builders don’t have the luxury of waiting for a brighter day. The more highly leveraged companies are slashing prices to move inventory to generate cash and pay down debt. This fall, builder Hovnanian Enterprises Inc., based in Red Bank, N.J., offered discounts on homes of as much as 30%, while Standard Pacific Corp., of Irvine, Calif., has been offering discounts and other incentives of as much as 25% on certain homes. Both companies say their recent, heavily marketed discounts have sparked sales in the difficult market.
Lennar Chief Executive Stuart Miller recently called some price cuts “unrealistic and maybe even ridiculous.” “The market has just deteriorated more and more. We don’t want to go below a certain floor, and that is the floor of reasonableness,” Mr. Miller told analysts on a conference call in late September.
Outside some of its Orange County developments, Lennar continues to discount homes in many markets to make sales under increasingly tough conditions. In the third quarter, Lennar delivered 7,636 homes at an average price $296,000, including discounts or amenities of $46,000 per home. That compares with an average price of $316,000, including $35,900 in discounts and amenities in the year-earlier period.
Lennar’s move in Orange County is unusual in that the company is mothballing homes. Builders typically mothball partially developed or undeveloped land because vacant homes require watching. One alternative would be for builders to sell their land instead, but that market is even more dismal than the one for housing. Recent land transactions in California, Phoenix and Southeast Florida, while few in number, have fetched discounts of 70% and 80% on finished lots, according to Zelman & Associates, an independent housing research firm.
“They have all this land that they need to turn over, so they keep building,” says Paul Puryear, an analyst at Raymond James & Associates. “We would recover so much quicker if you could just turn it off, but you can’t turn it off.” Lennar may be in a better position than others to mothball certain developments and land. The company was one of the first large builders to discount homes through much of 2006, burning through its unsold inventory and generating cash. At the time, the company was criticized for softening prices, but “it ended up being the right move given the subsequent deterioration in the market,” says UBS analyst David Goldberg. Although it posted a $514 million third-quarter loss, the company ended the period with a net debt-to-capital ratio of 36% compared with an industry average of 43%, Mr. Goldberg says.
Luxury builder Toll Brothers Inc., based in Horsham, Pa., said last week that it is willing to hold prices, even if that means generating few sales. Mr. Sood says such a strategy amounts to the “effective mothballing” of certain developments. “They might have a salesperson in these communities, but it’s effectively fallow,” Mr. Sood says. “They are selling less than one home a month” in some communities. Chief Executive Robert Toll said builders with cash problems may need to reduce prices more aggressively. “But fortunately, for the time being, that’s not us,” Mr. Toll told analysts on a conference call last week.
Builders continue to put up new homes, though in far fewer numbers than during the housing boom. According to the Census Bureau, builders started construction on 79,400 single-family and 21,200 multifamily homes in September, which was down 33% and 31%, respectively, from the same month a year earlier. Housing starts are off by about 48% from a peak in January 2006.
Considering there are too many houses already looking for buyers, it might seem surprising that builders are building at all. But unlike auto manufacturers that can ramp production up or down in a matter of weeks, it can take years for a housing development to makes its way through the development pipeline. By the time the builder has spent money putting in roads and sidewalks, the housing market may have turned. “Many builders are stuck between a rock and hard place,” says Jonathan Dienhart, director of published research at Hanley Wood Market Intelligence, a housing research firm in Costa Mesa, Calif. “They can’t make money by building, and they can’t make money by not building. They have to choose the lesser of two evils.” Lennar’s Mr. Haddad says the builder had to finish constructing the first phase of its Irvine project, called Central Park West, where the mix of condos and town homes had an average price of $700,000. “You create a stigma for a community if it’s only half built,” Mr. Haddad says. The 14 buyers who signed contracts for the 259 homes got their deposits back. A spokesman for Lennar’s partner in the project, San Francisco-based Stockbridge Real Estate Fund, said, “We are under no pressure to sell strong assets into a weak market, especially where the market’s long-term prospects remain favorable.” Mr. Haddad says Stockbridge has a larger equity stake in the project than Lennar, but he declined to elaborate. Mr. Haddad says the lender on the project, Britain’s Barclays PLC, is “fully aware of what we are doing.” Barclays declined to comment.
In ecology, a niche refers to the place or position occupied by an organism or a population within an ecological community called the ecosystem. It is the term which defines the role the organism or the population plays in the general scheme of things. The niche an organism or a population holds is the one responsible for dictating the ability of the species to survive. It is the one which spells whether an organism or a population will perish or thrive.
In marketing, a niche refers to a service or a product that occupies a special area of demand. It is that small corner in the market that accounts for a certain kind of specialty concerning an unmet customer need. To be able to attract a strong, solid market, the choice of a niche product should ultimately complement the website one owns. It is through this scheme that he is able to generate a specific market for the niche product he is trying to sell.
Niches are involved in niche marketing, the process of finding market segments that are small but potentially profitable nonetheless. To maintain a profitable quantity of sales, this marketing strategy relies on increasing the loyalty of customers so that their corporate objectives will be met or surpassed. Illustrative of this is the fact that the quality of the product or service sold will generate customer satisfaction and, consequently, customer loyalty. The result is profitability garnered through a solid market base that trusts in the ability of the product or service to really deliver.
One of the great things about niche marketing is that it encourages those who indulge in it to be unique and one-of-a-kind. Here one is not forced into the lion’s den and made to compete against established marketers. He is made to occupy a strong and secure position that ultimately wins him a real place in the market. Niche marketing differs from other online marketing strategies because this particular quality allows it to operate almost autonomously and without having to contend with corporate sharks that tear each other to pieces.
One of the most important things that should be thought over by those involved in this type of business is the niche business that is going to be involved in the process. It is important to consider the type of business that one is going to work on to be able to ensure himself of the success that he hopes to have. It is also important for him to know everything about the niche business at hand. Learning the tricks of the trade in is one of the things that one could do to make a niche business prosper tremendously.
Being able to reach the niche market is another consideration to make. In doing so, one should know the exact phrases that people are searching for. The use of tools can help a lot in knowing the type of keywords that should be used to make the business profitable. Targeting the right keywords does a lot in making this type of business soar.
Those who engage in niche marketing know that determining the potential of a niche before doing everything else is a must if one wants to save all the time and effort that might be wasted if he plunges into everything head on. Building a niche marketing site that proves to be profitable should be done after an unsatisfied customer demand is identified, and marketing the site appropriately by reaching out to customers the best possible way is what niche marketers should consider if they want their business to reach skyrocketing success.
Is niche marketing needed in a world teeming with a hundred like systems designed for people to make money online? Those who know how the system works will answer in the affirmative, because niche marketing is the only system capable of filling up a gaping hole in the market by catering to the unsatisfied needs of customers - needs that are usually not given notice by those in the big league. Though niche marketing, one is able to gain a foothold in the market by being a needle in a haystack. Small and inconspicuous it may be, but its ability to sting someone so madly once it is found will render him more than surprised.
Andy Huang
The price of Google Assassin is about to increase… in the next 24 hours.
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One of the most important aspects of a search engine optimization project is also one of the most overlooked – preparation! There are some important steps to take in advance of optimizing your site that will make sure your SEO is successful.
Before You Start
Before you start any search engine optimization campaign, whether it’s for your site or that belonging to a client, you need to answer the following questÃons:
1) What is the overall motivation for optimizing this site? What do I/they hope to achieve? e.g. more sales, more subscribers, more traffÃc, more publicity etc.
2) What is the time-frame for this project?
3) What is the budget for this project?
4) Who will be responsible for this project? Will it be a joint or solo effort? Will it be run entirely in-house or outsourced?
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Answering these questÃons will help you to build a framework for your SEO project and establish limitations for the size and scope of the campaign.
Ready: How Search Engine-Compatible is the Site Currently?
Something I find very useful before quoting on any SEO project is to produce what I call a Search Engine Compatibility Review. This is where I carry out a detailed overview and analysis of a site’s search engine compatibility in terms of HTML design, page extensions, link popularity, title and META tags, body text, target keywords, ALT IMG tags, page load time and other design elements that can impact search engine indexing.
I then provide a detailed report to potential clients with recommendations based on my findings. It just helps sort out in my mind what design elements need tweaking to make the site as search engine-friendly as possible. It also helps marketing staff prove to an often stubborn programming department (or vice versa!) that SEO is necessary. You might consider preparing something similar for your site or clients.
Steady: Requirements Gathering
Next, you need to establish the project requirements, so you can tailor the SEO campaign to you or your client’s exact needs. For those of you servicing clients, this information is often required before you are able to quote accurately.
To determine your project requirements, you need to have the following questÃons answered:
1) What technology was used to build the site? (i.e. Flash, PHP, frames, Cold Fusion, JavaScrÃpt, Flat HTML etc)
2) What are the file extensions of the pages? (i.e. .htm, .php, .cfm etc)
3) Does the site contain database driven content? If so, will the URLs contain query strings? e.g. www.site.com/longpagename?source=123444fgge3212, (containing “?” symbols), or does the site use parameter workarounds to remove the query strings? (the latter is more search engine friendly).
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4) Are there at least 250 words of text on the home page and other pages to be optimized?
5) How does the navigation work? Does it use text links or graphical links or JavaScrÃpt drop-down menus?
6) Approximately how many pages does the site contain? How many of these will be optimized?
7) Does the site have a site map or will it require one? Does the site have an XML sitemap submitted to Google Sitemaps ?
What is the current link popularity of the site?
9) What is the approximate Google PageRank of the site? Would it benefit from link building?
10) Do I have the ability to edit the source code directly? Or will I need to hand-over the optimized code to programmers for integration?
11) Do I have permission to alter the visible content of the site?
12) What are the products/services that the site promotes? (e.g. widgets, mobile phones, hire cars etc.)
13) What are the site’s geographical target markets? Are they global? Country specific? State specific? Town specific?
14) What are the site’s demographic target markets? (e.g. young urban females, working mothers, single parents etc.)
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15) What are 20 search keywords or phrases that I think my/my client’s target markets will use to find the site in the search engines?
16) Who are my/my client’s major competitors online? What are their URLs? What keywords are they targeting?
17) Who are the stake-holders of this site? How will I report to them?
18) Do I have access to site traffÃc logs or statistics to enable me to track visitor activity during the campaign? Specifically, what visitor activity will I be tracking?
19) How do I plan on tracking my or my client’s conversion trends and increased rankings in the search engines?
20) What are my/my client’s expectations for the optimization project? Are they realistic?
Answers to the first 10 questÃons above will determine the complexity of optimization required. For example, if the site pages currently have little text on them, you know you’ll need to integrate more text to make the site compatible with search engines and include adequate target keywords. If the site currently uses frames, you will need to rebuild the pages without frames or create special No-Frames tags to make sure the site can be indexed, and so on.
This initial analysis will help you to scope the time and costs involved in advance. For those of you optimizing client sites, obtaining accurate answers to these questÃons BEFORE quoting is absolutely crucial. Otherwise you can find yourself in the middle of a project that you have severely under-quoted for.
The remainder of questÃons are to establish in advance the who, what, where, when, why and how of the optimization project. This will help you determine the most logical keywords and phrases to target, as well as which search engines to submit the site to.
For those of you optimizing web sites for a living, you might consider developing a questionnaire that you can give clients to complete to ensure you tailor the web site optimization to their exact needs.
Go!
So now you are clear about your motivations for optimizing the site, you know more about the target markets, you know how compatible the existing site is with search engines and how much work is involved in the search engine optimization process. You’re ready to tackle the job.
About The Author
Article by Kalena Jordan, one of the first search engine optimization experts in Australia, who is well known and respected in the industry, particularly in the U.S. As well as running a daily Search Engine Advice Column, Kalena manages Search Engine College - an online training institution offering instructor-led short courses and downloadable self-study courses in Search Engine Optimization and other Search Engine Marketing subjects.