How to Outperform in a Slow Real Estate Market
By Jennifer K. Donovan

There is no doubt that many developers across the country are feeling the effects of a down real estate market. The years 1995 through 2005 were a good ride for many – both consumers and developers. Housing prices were tripling, people were buying and selling, and everyone was making huge profits. Reality has now set in and we are facing significant market corrections. The housing bubble is deflating. Interest rates have risen, there is huge inventory on the market, and sales have fallen off dramatically.

But do not despair. Things are cyclical. It may take some time, but it will eventually come around again. Many of you are wondering what you can do now for projects that are in the development process. How can you continue to perform and even outperform the current real estate slump?

Be unique. There are still buyers out there who have disposable income and are looking to buy real estate. Now more than ever, it is important to set yourself apart. If there are fewer buyers out there, the competition becomes greater. How will you set yourself apart from the competition?

Elevate your buyer pool from a regional market to a national and/or international market. Branding has been successful for a long time within golf, and now there are other branded amenities – Spas, Restaurants, Tennis, Health & Fitness and Equestrian Facilities. Branding will help your project tap into a larger market pool with increased PR and marketing avenues that will make you stand out from the crowd.

Watch the trends to deliver what people really want. The days of super-sizing and McMansions are on their way out. People still will pay top dollar for homes, but they want quality, better designs for use, smart technology and energy efficiency - all in a smaller, more manageable size. People initially thought bigger was better, but it costs more money to furnish these huge spaces, there is a lot of dead space that goes unused, and cleaning and keeping everything up is time-consuming. The Not So Big House by Sarah Susanka is fueling an entire movement. This philosophy is based on creating and designing more intelligent spaces that reflect the way we live and interact.

Be on the forefront of the green movement. If you are not currently planning for homes and amenity buildings that are energy-efficient, LEED-certified or Earth Craft-designed, you are already behind the curve. This is the biggest movement we have ever seen towards sustainability and care for the environment. And interestingly enough, it is a grassroots movement being driven by the Baby Boomers who care about the earth and Global Warming. Buyers are demanding more open space with green design, which has lower impacts on the environment. This will continue to ramp up over the next few decades.

Pay attention to women as consumers. In a recent book titled BOOM: Marketing to the Ultimate Power Consumer - The Baby Boomer Woman, authors Mary Brown and Carol Orsborn report that:

• In the next decade, women will control two-thirds of the consumer wealth in the U.S., influencing as much as 80% of the $2.1 trillion dollars that Boomers spend on consumer goods and services.
  
  
• Eight out of ten Boomers say that they do not intend to retire, with an estimated 52% growth in the category of women aged 55+ projected in the U.S. workforce by 2010. As one would expect, disposable incomes are also highest for women aged 45-54.
  
  
• Even in traditionally male-dominated categories, women are responsible for more than half of the purchase decisions. Women make 80% of home improvement decisions, buy 65% of all new vehicles, and spend more than $55 billion dollars on consumer electronics, an industry that generates $96 billion in annual sales.

Women are making the home-buying decisions, and for years, male developers have not paid attention to what women want. Women want amenities they can enjoy, and for decades, they have been left out. Women also want activities and spaces for bringing families together. There has always been golf, and some communities have had marinas for fishing, as well as hunting clubs – these are all amenities traditionally designed for men. Women were lucky if they had tennis. Think family interaction, as well as activities and services for women.

By including an equestrian amenity, a developer can address each of the five methodologies listed above for beating the real estate market slump.

Be unique. An equestrian amenity is very different than what most communities offer, and equestrian sports are the 5th-fastest growing sport in the U.S. This amenity is something everyone can participate in. When you add an equestrian amenity that is programmed, designed, managed, and executed with the highest industry standards, you have definitely set yourself apart.

Elevate your buyer pool to a national/international level. By adding an equestrian amenity that is branded, you will set yourself apart from all others and suddenly elevate your project to a national and even international level. O’Connor Signature is currently helping one community outperform in the Florida real estate market. This is notable, considering Florida has been one of the states hit hardest by the real estate market correction.

Watch the trends to deliver what people really want. The equestrian amenity certainly plays no part in helping design better more efficient homes, but from a purely equestrian perspective, there are important trends to watch. For example, trail riders and equestrians in general are losing access to places to ride at an alarming rate. Many horse people want communities with interesting trails that will be preserved for perpetuity. This adds tremendous value for the equestrian buyer, as well as the nature lover who will also utilize the trails.

Be on the forefront of the green movement. Equestrian amenities maximize the use of the natural environment for the developer, builder, and the horse and nature lover. Green design practices include reserving large tracts of open space for pasture, cross-country courses, and creating and maintaining quality trails for riding and walking. Wildlife corridors, proper pasture rest and rotation practices, water reclamation, erosion and run-off management, and maintaining the highest possible safety and health standards for the horses and their riders also are all part of the culture of sustainability required by an effectively planned equestrian amenity. Other sustainable practices, including using LEED-certified designs along with recycled materials, are also often considered in equestrian community design. Fence materials, stall and aisle flooring and barn siding are all available in high-quality LEED-certified or recycled materials.

Pay attention to women as consumers. Women and girls love horses. In a recent report by the American Horse Council, the fastest-growing equestrian demographic is women over 45 years of age. So ask yourself an important question: What activities have you planned for the women and children? An equestrian amenity provides an environment for women, kids, and even their husbands – this is an activity the whole family can enjoy together. Even if the women don’t ride, they can drop off the kids while they run errands or go to the Spa for a massage or pedicure. Doesn’t it make sense to add an equestrian facility? And a spa too, of course!

Hard times call for creativity. A time to reassess visions, identify market niches, and question the old “tried-and-true” model. What worked for you from 1995 – 2005 may not work now. All growth and change comes from hard times. So use this slump to reinvent yourself and be creative. There are still ways to be successful now and attract that buyer.

Jennifer Donovan is a Co-Founder and Principal of Equestrian Services, LLC (Charlottesville, VA), which provides turn-key equestrian amenities for communities and resorts throughout the United States.

This article is reprinted with permission from Equestrian Services LLC, August 2007.

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Equestrian Communities Bring the New Ruralism Lifestyle to Market
By Jennifer K. Donovan & Michael M. Donovan

The American Dream has always included a nice home, friendly neighbors, and satisfying work and play. But the dream has changed over time. In the 1940s and 1950s, families migrated from farms and rural areas to more urban settings. Today, the trend is reversing itself, but in a new way.

As baby boomers are increasing the number of mature adults at record numbers, they are realizing that something valuable got left behind – a connection to the land and the sense of well-being it provides. Now, thanks to technology and a new affluence, active adults, as well as families, are carving out a new lifestyle niche that presents a unique opportunity for builders and developers: New Ruralism. New Ruralism, a term that encompasses the best of rural living with the best of suburban living, has emerged as the hottest new lifestyle sought by both young and mature.

Drawn to a simpler time, New Ruralism neighborhoods are being developed where community connection, safety and activity for children, and the natural environment are the centerpieces. With dedicated open space and connections to a natural environment at the heart of the new ruralism concept, community residents find it easier to connect with neighbors, while also maintaining their privacy. Additionally, this type of development allows for a safe yet active lifestyle for themselves, their children and/or grandchildren.

At the same time, while leaving behind the hectic pace of city life and constant stimuli, people still crave satellite TV, mobile phone coverage and high-speed internet, and gourmet shopping. This combination epitomizes New Ruralist living.

Crossing Markets with New Ruralism

From families to active mature adults, there is a ready market for developments steeped in the New Ruralism design principles. The aging boomer market is redefining retirement and is the most active demographic group to date. Affluent, in good health, and seeking activity, today’s retiree “retired” from the shuffleboard court long ago. To compliment their active lifestyle, they also want community interaction and are drawn to more sustainable community designs. New Ruralism fits the bill.

Families are drawn to the New Ruralism concept as they seek safer, more active environments for their children, without giving up the amenities of city or suburban life. Many would like to embrace the days of telling a child to “just be home before dark”.  Parents today want their children to experience life as they knew it when they grew up, and they want their children off the couch, away from the video screen, unplugged and outside.

In fact, childhood has changed to the point that a new term has emerged: “nature deficit disorder”. Coined by author Richard Louv, who wrote "Last Child in the Woods: Saving Our Children From Nature-Deficit Disorder."  Nature deficit disorder speaks to the idea that sensationalist media coverage and paranoid parents have literally "scared children straight out of the woods and fields, while promoting a litigious culture of fear that favors 'safe' regimented sports over imaginative play.”

Building secret forts and tree-houses, catching frogs and fish, swinging on a tire swing, going for a trail ride, spending a day at the barn, and playing hide-and-seek in the woods are all activities that New Ruralism offers and encourages.  

The Equestrian Amenity: New Ruralism In Action

As a wide range of people actively seek the New Ruralist lifestyle, a range of their expectations can be accommodated, or even exceeded, with one element – the equestrian amenity. From those that have a fond childhood dream of riding with Robin Hood or the Lone Ranger, to those who compete in amateur horse shows on the weekends, horses evoke an emotional – sometimes passionate – response from almost everyone. While typically only a small percentage of residents actively ride in a community (similar to the typical 15 to 25 percent of golf community members who actually playing golf), all residents receive just as much enjoyment. A well-designed and executed amenity will keep horses and riders happy and using the facility – which in turn provides ongoing opportunities for the other residents to have their desires met.

These communities are also, almost by definition, lower-density. But don’t be misled by the old school “density equals dollars” equation. Buyers will pay a premium for a lot (and often a relatively small lot) that has access to significant natural open space and provides the opportunity to interact with horses and nature.

Communities that include an equestrian amenity conserve the land and utilize the natural environment to its fullest, all the while bringing much needed services – and lifestyle opportunities – to the New Ruralism seeker, whether they have a horse as a member of their family, or if they simply appreciate gazing at horses peacefully grazing in a field. As more people are drawn to its principles, New Ruralism communities with an equestrian amenity will continue to be in high demand.

Jennifer K. Donovan and Michael M. Donovan are Co-Founders and Principals of Equestrian Services, which provides turn-key equestrian amenities for communities, resorts and a few select municipal clients nationwide and designs and assists in creating efficient, aesthetically-pleasing, well-planned equestrian facilities.

This article is reprinted with permission from Equestrian Services LLC, August 2007.

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O'Connor Signature News
Follow Legendary "Teddy" and Karen O'Connor as they Amaze the World!

• The Washington Post: My, My, Little Pony, September 6, 2007
  
  
• NBC's The Today Show: Appearance, August 8, 2007.
  
  
• Horse & Hound Online (UK): Pony wins double gold at Pan Am Games, July 24, 2007
  
  
• Ocala Star-Banner (FL): O'Connor Captures the Gold Medal, July 24, 2007
  
  
• The Washington Post (DC): Just a Pony, But Riding High, July 23, 2007
  
  
• Equisearch (NY): US Eventing Team and Pony Win Pan Am Gold, July 23, 2007
  
  
• Mathaba: U.S. Dominates Equestrian Eventing Events, July 23, 2007
  
  
• Equisearch (NY): US Eventers Lead After Pan Am Dressage Phase, July 20, 2007
  
  
• SFC Presspoint (FL): Team USA Packs an Early Punch with Five of Top Six Riders after Eventing’s Dressage Phase, July 20, 2007
  
  
• The Free-Lance Star (VA): O'Connor Wins Honor From USEF, June 28, 2007

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In the News

Equestrian Services, LLC is making headlines and bylines again. Our recent article "When Conservation Meets Development" has been featured in the August issue of ARDA's Developments, as well as the July/August issue of Arizona/Texas/Nevada Homebuilder.

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Submit a Question:
Will my equestrian amenity be profitable? Will I recover my capital investment from revenues generated by my equestrian facility?

Unfortunately, you will not recover your capital expenditures from the revenues generated at the central facility. Chances are that as a stand-alone, it will need to be subsidized by the HOA or some kind of membership program in order to break even. The return on investment you will make off your equestrian amenity is in your real estate - amenitized vs. non-amenitized land. The equestrian element can help quicken your absorption rate, and horses are fabulous for advertising, marketing and public relations. The equestrian amenity as a stand-alone is a lost leader - they help sell real estate, and they create a theme for the community, which makes it more desirable.

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