The United States is seeing a major shift in homeownership. Millennials are finally reaching the age where they are buying houses in large numbers. Meanwhile, people who can now work from anywhere are moving all over the country. This creates both an opportunity and a challenge for HVAC contractors.
The challenge is keeping a house on the service list. The opportunity is gaining a new customer relationship, one that could last for decades. HVAC contractors in high-growth areas are taking steps to ensure that second outcome happens.
Realtor.com recently identified some of the best markets for first-time homebuyers. Many of these markets are seeing a lot of activity from both people entering the market for the first time, and those who are relocating.
One of these towns is Portsmouth, Virginia, located just outside of Norfolk. This is in the service area for American Mechanical. President John Gordon said the firm often deals with new occupants due to the high turnover created by the number of families attached to the military. Norfolk Naval Shipyard and the U.S. Coast Guard are two of the biggest employers.
New Owners, Old Owners in New Places
Placing stickers on the equipment plays a key role in keeping a house on the service list when there are new owners, Gordon said. About 25% to 50% of new owners respond to the stickers, he said. All of American Mechanical’s marketing uses different phone numbers, so the firm can track whether the call came off one of these stickers, someone seeing it on the side of a van, or a direct market piece.
Gordon said American Mechanical staff work with new owners to transfer over any warranty that may come with a piece of equipment. They also work with those who move in-market to transfer over some maintenance to the new house.
Those buying a new home want to have peace of mind. They are concerned about keeping the equipment running without problems.
“The customers definitely want to know if there’s anything they can do between trips,” Gordon said.
Typical advice is to change the filters regularly and hose off any lawn clippings in the summer. To create a good first impression, Gordon said American Mechanical aims for having the best-trained technicians. The firm operates its own in-house training and tries to limit turnover.
Gordon said it’s interesting how the technicians and the salespeople view the same address. Technicians tend to think in terms of the equipment in the house, identifying it by the street number, while salespeople think of the occupants, identifying it by their names. Both play crucial roles in keeping and adding customers.
Houses that are More than Homes
Boise, Idaho, is another high growth area. Long known for its natural resources, Boise has become a destination for former West Coast residents seeking a lower cost of living. The hot market creates an opportunity for HVAC contractors, said James Barrett, marketing manager for Access Heating and Cooling.
“There are a lot of homes being sold right now and they’re not being fully inspected,” Barrett said.
A general inspector will do basic inspection of an HVAC system to make sure it’s working, but buyers, especially first-time buyers, want to know more. They want to know how old a system is and the best way to maintain it.
“The biggest concern we hear is they want to make sure that unit is going to work as long as possible,” Barrett said.
Access offers a free walkthrough in the first 30-60 days after the new owners move into the home. The firm buys lists of real estate transactions and works with local real estate agents to target this segment. Barrett said they need to move quickly, because once homeowners move in, they are bombarded with advertising for everything from a new bathroom to power washing the exterior. All of these eat into the limited budget for home improvements.
The needs of new homebuyers are different than they were pre-pandemic, Barrett said. People are using their homes for a variety of purposes and spending more time in areas they once ignored. This creates the opportunity to sell ductless mini splits.
“You used to go out to look at replacing the system for the home and now you’re looking in the garage, too,” Barrett said. “Homeowners have been more open to different ideas to take care of their home than they have been in the past.”
The hot market means marketing professionals like Barrett need to keep on top of who is moving in and whether the previous occupants are staying the service area. The run-up in home prices means some people have less to work with when it comes to HVAC upgrades, while at the same time, long-time owners have more money to take care of their homes.
“It’s been very dynamic,” Barrett said. “What was working a month ago, you probably need to change.”
He recommends staying with the real-estate professionals. That includes both real estate agents and home builders.