Developing on the coast is quite different from developing elsewhere. Most of the time, the coastal buyer is a vacation or retirement homebuyer.

In many cases we have sold homes to individuals who start by using them as retreats. They’re rented through a property management company when the owner is unable to use the getaway. Frequently, these homeowners gain time to spend at the coast, and sometimes the property becomes a primary home.
When we start a new project we spend a lot of time thinking about the target customer. We do a complete market study of what is available in other coastal communities, and what is and isn’t working.

One constant for us is that our buyers are looking for something special. They have lived in a typical urban or suburban home for most of their lives and have decided it’s time to escape to the coast.

Our buyers generally are looking for a unique home on a special lot – a cozy dream cabin with a soothing view; easy beach, river or bay access; a fun bunk room for the kids or grandkids; and a garage with room for bikes, kayaks, boats and golf clubs.
Whether buying a single lot on which to build and sell a spec house or tackling a 90-lot subdivision, developers can create added value for themselves and their customers by creating unique and thoughtful beach homes.

A common mistake some developers and builders make is designing beach homes similar to urban or suburban homes when the customer wants something completely different. Our typical customer wants a traditional design, natural products (no stucco!), interesting details and funky spaces. The latter can include window seats for reading a great book; tiny lofts with a view window for meditating; Adirondack chairs on a small deck or patio for enjoying a glass of wine with a special person; and wood on interior walls and/or ceilings.
There is nothing harder to sell at the beach than a home with no “beach cabin charm.” Many people are not as interested in big yards, large kitchens or huge great rooms with vaulted ceilings and lots of painted surfaces. In fact, these things can actually be big negatives for people who simply want a charming little getaway.

It’s not about square footage, size of a lot or immense great rooms; it’s about view (not necessarily a water view), warmth, family togetherness and ease of upkeep. Developers or builders who don’t tune into these needs will not sell many homes on the coast.
In our case, if we can get them to stop for a beer at the Pelican Pub, we might sell them dinner and rent them a room at the Inn at Cape Kiwanda or a beach house at Shorepine Vacation rentals. Next thing you know, they are walking through an open house (with a lot of “beach charm,” of course) and before you know it, they’re asking about how to become an owner in one of our projects.

For more than 20 years, Mary Jones and Jeff Schons have focused on organically growing their Nestucca Ridge family of companies in Pacific City. Contact Mary at 503-550-7194 or mary@shorepineproperties.com. Contact Jeff at 503-550-7194 or jeff@nestuccaridge.com.

The post Coastal development comes with unique set of challenges appeared first on Daily Journal of Commerce.

To understand real estate investment on the Oregon coast, one must accept that the region experiences extreme seasonality, exaggerated economic cycles and periods of abject failure followed by periods of seemingly unjustified success. And all are dramatically affected by Mother Nature’s fickle and sometimes extreme weather patterns.

These factors create extreme risk and extreme reward; we have experienced both.

In our column series, we will share highlights and low points from our 20 years of coastal development experience and explore the factors that contributed to our successes and failures. We also will make some educated guesses at what the future may hold for those of us living and working on the edge.

Over our 20 years in Pacific City, we’ve developed three residential subdivisions, the Pelican Pub & Brewery, the Inn at Cape Kiwanda, Stimulus Espresso Café and the Cottages at Cape Kiwanda. We also have built custom and spec homes. And we started a property management business – Shorepine Vacation Rentals – and a real estate brokerage – Shorepine Properties.

The most important lesson we’ve learned is that developers and/or real estate brokers must find ways to understand what is happening in their markets and what their customers will buy. And they need to learn how to do business creatively.

A great example of this is the Cottages at Cape Kiwanda, which we launched in summer 2007. This oceanfront property is drop-dead gorgeous, featuring townhouse-style units to be sold in fractional ownership. This project seemed like a no-brainer: Who wouldn’t want to buy an affordable piece of paradise in Pacific City?

Now, remember what happened in summer 2007 – the mortgage subprime debacle hit like a ton of bricks. All of the sudden we went from feeling like geniuses to feeling like fools.

We knew at that point that we needed a creative new strategy. To make a long story short, we developed a new “One Day Sale” concept. These events bring interested people together in a group format to learn about and seriously consider purchase of a fractional share in an oceanfront vacation home.

They are able to meet and know us personally as developers. And they can become acquainted with the entire hospitality team that will ultimately take care of them and their new vacation home. This is a much more personal and in-depth opportunity, which seems to help people make purchase decisions.

This is a great example of finding a creative way to sell something in the face of a challenging market. As a result of this new strategy, in 2010 we were able to sell a lot of shares – enough that the property became the highest-selling of its kind in North America, Mexico and the Caribbean.

It’s clear to us that the real estate market has hit the bottom (at least on the central coast). There is a lot of activity now; people want to complete good deals before prices go back up.

In our area, the dollar volume of sales and average prices increased in 2011 from 2010, and that is a clear indicator to us that the market is in recovery. What does that mean for a real estate investor? Clearly, it’s time to buy. Seriously.

For more than 20 years, Mary Jones and Jeff Schons have focused on organically growing their Nestucca Ridge family of companies in Pacific City. Contact Mary at 503-550-7194 or mary@shorepineproperties.com. Contact Jeff at 503-550-7194 or jeff@nestuccaridge.com.

The post Insights into real estate development, construction, sales and marketing appeared first on Daily Journal of Commerce.