'Niche marketing' key to confidence in housing.

While new residential construction remained at low levels during the first half of 1992, increased, but cautious public confidence in the economy generally, and the homebuilding industry specifically, signaled a strong possibility of continued, but cautious improvement.

Sales offices throughout the Greater New York region saw an upswing in traffic and a new decisiveness on the part in the year to date. It is apparent that more and more people feel that the market has bottomed out or is close to it, and that putting off the buying decision any further might prove costly, as prices begin to rise and mortgage rates continue relatively low and may go lower.

Smart developers have already begun efforts to nurture these first signs of a market turnaround. Capitalizing on still-low interest rates, they are developing creative marketing programs built around value, quality and lifestyle to capture the slowly expanding home-buyer market.

The most note-worthy new marketing programs establish a niche to separate their developmental and sales efforts from the competition. These efforts capitalize on readily definable physical attributes such as location, size, amenities and distinctive design, or establish a perception upon which to build public credibility and acceptance. Most often, the best of these programs do both.

Two apt examples are marketing/advertising programs in which we are currently heavily involved.

In one, a 27-story-high-rise condominium tower in Forest Hills, Queens, the recent bear market attracted surprising number of buyers through a sales mix of conventional marketing and multiple auctions, as well as a promotional campaign positioning the tower as a Manhattan building that happened to be located in Queens.

In the other, a new 22-story condominium building on Manhattan's West Side promotes a location on the edge of Central Park, a "pre-war" architectural style and a one-apartment-to-a-floor layout to entice prospects to residences priced in excess of $1 million.

The 219-residence Queens building - called The Pinnacle is now well into a hugely successful sales program. more than 130 sales representing $25 million worth of real estate have been recorded in less than a year - largely through the first use of multiple auctions for a single New York City property, and an aggressive advertising and promotion program which extolled the building's Manhattan-like amenities and services.

The auctions proved to be spectacular to say the least. The first one turned out more than 3,000 people and resulted in sales of 73 residences for $15 million; the second - held nearly six months later - brought in additional sales of 33 homes for $5 million. Equally significant, conventional sales since the auctions have reflected an even higher price per square foot.

The campaign for 353 Central Park West keyed on identifying the building with the culture, visual excitement and emotional appeal long associated with luxury living on Manhattan's posh Central Park. Ads associated the unique architectural character and ambiance of the West Side and Central Park neighborhoods to the building's own distinctive values - which include a limited collection of huge layouts - one residence to a floor - ranging up to 2,700 square feet, spectacular views of Central Park from every residence, and interior design treatments that combine |old-world' quality with all the modern conveniences of condominium living.

Of note in the campaign is an intriguing print ad that incorporates an entire editorial piece on the building that appeared in the New York Times. Using an entire Times story for advertising is an approach rarely seen in this city. But since the article was a rave review - titled "A Dream Apartment" from an important source, it was just too good to pass up.

Such marketing programs can only strengthen growing buyer confidence in the health and vitality of the residential market.

If interest rates, mortgage availability and consumer-perceived value remain relatively positive for the balance of the year, we can expect continued improvement during the remainder of 1992 and well on into the new year.