Monday, September 27, 2010

The 100k House in Philadelphia

I've been a fan of the 100k house website for almost 3 years. Chad Ludeman has created an innovative home building and marketing business model, an accomplishment that no large builder in America could ever do.

One recent post sums it up: High Performance Houses

They've nailed it, pure and simple. Contrast it to a subdivision that was nixed by Golden. Golden has no idea of what it really wants, but they had this feeling they didn't want this. Over time, they'll understand that they want 100k houses and neighborhoods.

Does anyone else besides me think Denver is ready for something similar to 100k? The biggest difference in the two markets is that Philly has thousands of low-cost vacant lots ripe for redevelopment. In Denver, a vacant lot in a good neighborhood doesn't exist, so scrapeoffs in lower tier neighborhoods may be necessary. Let's finish the infill process in Denver and scrape or renovate worn-out houses as required before we tear up irreplaceable open space in Golden.

Their list of innovations really covers every phase of the business, except maybe the use of realtors. Lots of folks thought realtors would become obsolete because of the internet, and it just hasn't happened, and doesn't look like it will happen. Postgreen (the 100k development company) however, has pre-sold a high percentage of their homes. This means that they haven't really needed the conventional realtor relationship.


  1. Thanks for the props Kevin. I'm interested to learn more about what is going on in Denver's market.

    I just wanted to chime in and add one comment in regards to the Realtor aspect. Our Realtor is actually my wife and co-owner of our companies. She has been invaluable. Yes, we generate most of the leads for the homes online, but that is only the beginning. She follows up with everyone and answers questions we could not. She converts leads to sales and then handles all of the detail and legal issues from signing the contract to handing the new buyers their keys.

    We get a lot of local builders asking us to give them tips on how to sell their properties themselves and I always tell them the same thing. Hire a good Realtor. A good Realtor is like a good stock broker. They are worth their fee because they are getting you good results.

    This could change in the future, but for now a good Realtor is well worth it. You will sell faster and for more and with far fewer headaches and work on your end. Yes, there are a lot of lousy Realtors out there, but do your due diligence in finding a good one and you will not regret it.

    Keep up the great blogging and thanks again for the reference.

  2. Those of us who thought the realtor business model would change quickly are wrong for all the reasons you state. A house is just too big of a purchase to try to negotiate without "a trusted and well-informed advisor", so folks keep using them.

    On the selling side, your Courtney is more of a VP Sales than a Realtor with a listing.

    Check out the book Freakonomics to learn how realtors have historically tried to monopolize and hoard information in order to maintain their raison d'etre.

    So it turns out that the MLS information that realtors hoard isn't that important to their success.

    Zillow is trying their darndest to topple realtors' monopoly on information, but it looks like they may run out of money before they will succeed.

  3. Good post. The situation of real estate has improved and it looks like that real estate is recovering from the economic recession of 2010 and 2011. I was reading yesterday that people have again started albeit slowly to invest in real estate market which is good for all the real estate agents, companies and brokers.