What New Construction Buyers Want (with Chattanooga Realtor Grace Frank)-168

What do today’s new construction buyers really want and what are builders still getting wrong? In this episode of the Anewgo of New Home Sales Podcast, Anya Chrisanthon sits down with Chattanooga powerhouse Realtor and team leader Grace Frank to unpack the latest design, pricing, and buyer-behavior trends shaping 2025 and beyond.

You’ll hear how Grace built one of the top new construction teams in her market, why she’s obsessed with smart design and “mystery shopping” through open houses, and what she’s seeing on the ground with relocation buyers, energy-efficient homes, and multi-generational living.

In this episode, we cover:

• The state of the Chattanooga new construction market and why secondary markets are booming
• Why price parity between resale and new construction is changing buyer expectations
• Single-story vs. two-story, masters on main, flex spaces, and the rise of zero-lot-line homes
• Energy efficiency that actually sells: solar, insulation, HVAC, and how to talk ROI vs. “saving the planet”
• Design mistakes that make new homes sit — and how to create timeless, “wow” kitchens and baths
• How multi-gen layouts and on-property studios/in-law suites are reshaping floorplans
• What’s really happening with commissions post-lawsuit in new construction and resale
• Builder incentives that still work: rate buydowns, design credits, and smart lender partnerships
• Why builders should treat open houses like live focus groups (and do a lot more of them)
• Tips for working with relocation buyers who are shopping remotely but want to feel confident in a move
  
  

If you’re a builder, marketer, or on-site sales pro planning your strategy for 2026, this conversation will help you rethink product, design, and customer experience so you can sell more homes in a shifting market.

Transcript

Anya Chrisanthon 0:00

Hello and welcome everybody. Thank you so much for joining us for a new episode of a new go of new home sales. I'm your host, Anya Christian, and joining me today is Grace Frank. Grace is a real estate agent. She has, one of the, most successful teams in Chattanooga specializing in new construction. So I thought. Who better to, get us through the end of this year and get us on the right track for 2026 so that we can all sell as many homes as we possibly can to reach our year end goals and hopefully get our new year started on the right. Foot. So welcome to the show, Grace. I am so very excited to have you on today.

Grace Frank 0:41

Yeah, thank you so much. It's great to be here.

Anya Chrisanthon 0:44

So Grace, why don't we start off with, giving our listeners a little bit of a background on who you are. So if you don't mind telling us your life story and how did you get into new construction?

Grace Frank 0:56

Oh, okay. So I was in corporate America for a very long time, and in 2006. I had been an investor for about 10 years prior to that, but in 2006 when we moved to Chattanooga, I made the decision to go full-time into real estate. It's been a passion of mine for a long time. I've done a lot of flips, and so. When I was studying. Okay. What's one of the best ways to have strong relationships? Repeat business? Obviously one of the top things that came up was new construction and developing relationships with builders and developers and becoming very successful in that area. I had worked in healthcare, doing business development from the front end on new construction, but more commercial, but. I've always loved new construction and enjoying working with people getting through that process 'cause it is very unique and it's not for everybody. So that's how I started the new construction and over time, kept building. Relationships with more builders and developers. Because I have an MBA in marketing, it allowed me to be more unique and customized in branding them specifically for their projects. Not that it was my brand, but creating their brand. And I think that's really important for builders and developers to understand is that they need to create their brand. Yes, absolutely. Especially when the market

Anya Chrisanthon 2:25

is so competitive. It is. You can't just differentiate with, well, we build better homes, right? Mm-hmm. You really have to create a story around that. So we'll get more into that a little bit later, but first, I would love to hear about what is going on. In your local market. So tell us a little bit about Chattanooga, especially as it relates to new construction.

Grace Frank 2:47

Well, Chattanooga is an amazing secondary market. It's very outdoorsy. We've won some of the best, outdoor communities in the nation. We have amazing all round year types of hiking, climbing, hang gliding, kayaking, boating. It's just an amazing outdoor environment. I moved here from Boulder and I love it. It's a really dynamic little town. It has a lot of, really great restaurants and, it's one of those areas where you come here, you really love it, but it's a larger area and it's unique because Chattanooga is at the edge of Georgia, Tennessee, and Alabama. So within 20 to 30 minutes. You can be in three states. So it's unique from that perspective regarding new construction, we have a lot of new construction going on here because we've had a lot of growth to the area and certain areas are growing faster than other areas. Areas that we're sleepy before are now becoming more of an emerging market. North Georgia North. Alabama are all great areas and a lot as well as the greater Chattanooga area, going all the way up to Nashville and over to Knoxville.

Anya Chrisanthon 4:09

Very cool. And what do you see as far as demand goes for new construction, and what does your pricing looks like? I've been hearing a lot that there seems to be, almost a price parity now between new construction and a resale, which is very unusual. Typically, we've seen about 20% premium for new construction, but all across the country it seems like. It's very tightly priced right now. Is that something that you're seeing in Chattanooga as well?

Grace Frank 4:37

It is. And so a lot of it is the amount of product that is ready by builders that's on the ground and ready versus those that are. Three months out, six months out. That does lead into if there's buyers that need something now and can't wait, that, that's a key point. Another area is some people don't like, like a new neighborhood. They like the charm of an old neighborhood. So we are seeing builders going into more mature areas where there's still lots available and doing, custom homes in that area or spec homes. And that's also been very successful. Because not every buyer wants a new neighborhood. The other thing that's also very crucial is there's a lot of buyers that don't wanna deal with an HOA. If you're building a new neighborhood and there's a lot of HOA criteria, that detracts a lot of certain buyers. The other thing is price point. It's very hard to build a quality house. Under 300,000 right now. There are a couple of builders in our area that are doing that, but in general there's more building between 500 and a million and that minimizes your buyer. So it's very interesting. Right now there's a lot of buyers that are. Really looking for that retirement home, which is four to three bedrooms, three baths, single level, three car garage. And that's what they want. And a lot of builders haven't been building that. So it's also looking at the market demographic and how it's changing. And shifting and pivoting to meet that demand. And I think that's one thing where builders and developers really need to focus on right now because it's changing very quickly.

Anya Chrisanthon 6:27

Yes. So I actually just got back from, Denver where I was yeah, there for NAHB's fall leadership meetings. And, one of the best things happened during those meetings was Dr. Robert Dietz, who is the chief economist from NAHB. Mm-hmm. He presented to the group of young professionals, specifically on the next. 10 years because that is something that obviously affects so many young builders in the industry. And although it's very difficult to give a forecast for the next 10 years. But one of the things he talked about specifically was the household formation. Mm-hmm. We're seeing a dramatic decrease in the number of households, as well as birth rate. So, you need like something like 2.05 to sustain the current birth rate. Where right now we're at like 1.6 or something like that. So it's definitely contributing to that decline. And as we see that decline, less and less people are gonna be purchasing those homes. So the types of homes that will need to be build. He's talked specifically about need for more town homes instead. And also the fact that, Probably, a remodeling business is gonna be on that uptick given that there may not be as much of a demand for that single family home in the future. So, very interesting. We'll see how that all goes, but the message to all of you at home. Over the holidays you better get on that quota and start making some babies. Right. It seems like we need to. Well, you and

Grace Frank 8:06

so you talked a lot about townhomes. There has been a real spike up in townhome development. But I think there's another real interesting model. It's not a townhome, it's a zero lot line, single family home. We did a lot of that in Chattanooga. There's houses, they're single family, but they're a lot closer together. But it does, there's a little bit higher cost to that, but in terms of desirability, there's a lot more desirability for single family than multi, than town homes, if you had to compare apples to apples. So the zero lot line model is a really good model as well for single family.

Anya Chrisanthon 8:44

Absolutely. So yeah, the point is that we're definitely gonna have to be more creative Yes. Going forward. Well and design

Grace Frank 8:51

is gonna be everything. And a lot of the builders that I work with, they'll let me come through as they're doing the construction and refine some things. That's why we do open houses is. Because when we do open houses, we learn from buyers what they like, what they don't like about a home. And so I use open houses as kind of like mystery shopping. Mm-hmm. But I think that builders need to be very focused on their design. And I've seen so many make costly mistakes that make their products stand still. Yeah, can we talk

Anya Chrisanthon 9:25

a little bit about that? So yeah, with most recent trends, if you could name two or three different things that you think are really a must or something that new construction. Buyers are specifically looking for is that something you're incorporating into your homes?

Grace Frank 9:40

Right. So, obviously, two stories are a lot less expensive overall to build, than single story. But there is a very larger demand for single level. I think micro homes are going to do well, but I think they have to be priced well and have really nice features in order to be successful. But, I would say that. If you have a product and the majority of your product is masters, on the second level, you're setting yourself up for failure because that's, only 25% of the buyers are really interested in that. So anytime that you can have a master on the main and either a secondary. Bedroom. That could be a bedroom or an office. That's a really smart design. So masters on the main I think are very important. Interesting.

Anya Chrisanthon 10:36

I can definitely see the demand for extra bedroom or that flex space for office. My husband's working from home this week and we've been fighting who gets the office space, right? So it, I, I get that, especially post pandemic, most. Employers are flexible with work from home now. So I think that is something very important to consider when, designing your homes. Great points there. Grace, I'd like to shift things over a little bit and talk about marketing. Now your background is in marketing. You have master's degree in marketing. So when you represent home builders. Specifically, can you talk about some of the things that are working for you right now to attract your new construction buyer?

Grace Frank 11:20

Well, obviously price is very important. You can't forget price, but also features are important, and energy efficiency, that cuts down on their overall utility costs. Anytime a builder can do more sustainable products, we live in a market where there's. I don't, I would call them tree huggers and granola people, which I, I'm on the edge of that. But, they wanna understand like what materials you're using, how you're creating energy efficiency with insulation, and, just finishes so, anytime that you can enhance the efficiency of a home and show that to the consumer in terms of return on investment. Or, lower utility costs. Those are key factors for marketing. Also, it's like the features of the home that make it a more livable home. People like to feel like their home is very livable and usable, and not just not just a house, but how they can use the home as a real livable part of their family.

Anya Chrisanthon 12:31

Yes. That's great. We have seen that huge shift in, well, I shouldn't say huge shift. I think it, it is definitely been growing demand and energy efficiency. Mm-hmm. I know personally, my husband and I have invested a lot of money in upgrading our own home with, solar roof and, geothermal and things like that. So it's, it seems to be the trend. So when you're talking to consumers about. Efficiency in the home. What seems to resonate more? Is it the cost savings? Is it the fact that they're saving the environment? So health benefits, like what tends to resonate most?

Grace Frank 13:08

Well, it depends on the target market. Like baby boomers, have a different perspective than next gen who have a different perspective than millennials. So there's different target markets and what's most important to them? A lot of home buyers that are first time home buyers are obviously focused on, how to make their property less expensive. So energy efficiency is a very big part of that. A baby boomer who has more discretionary income, they may be thinking, well, if I put this new solar system in and over the next seven years, my return on investment is there and I'm making a difference. And the impact on our environment. I'm okay with that. So that's what I try to tell people is find out what's important to you. I have an organic farm and I actually bring a lot of buyers out there to see about solar and creating a solar garage and, rainwater catchment and things like that. And what's important, what can work, A lot of it depends on. Where you're at, and what actually can work more efficiently than not. And a lot of that depends on, what, like in the southeast electricity is pretty cheap compared to other areas of the country. However, you can still cut your bill in half if you do solar. Same water water's pretty reasonable here, so every part of the country has their own. Issues about, is water scarce, is rainwater catchment really gonna help make a difference? Do I have enough sun to really have a great solar system? Do I need to think about wind? But at the end of the day, my HVAC system that I use, the insulation that I use, how I structure the walls to make it more, energy efficient, the materials I use that are longer life are all key factors.

Anya Chrisanthon 15:04

Yes, definitely. So I would love to hear about some of the objections that you're currently hearing from your clients and as it relates to just buying a house and also specifically to buying new construction. What are you hearing right now?

Grace Frank 15:22

So interesting. Ductless systems, which are all well known all over Europe and have become more popular here are still a struggle with a lot of end users versus a traditional. Duck and HVAC system. We've done some, net zero projects where it was required to have the ductless system and there's still an obstacle with a lot of buyers of having a full house on a ductless system versus essential heat and air. That's been a struggle with some of our homes staying on the market longer. When you're doing a full ductless system, the other thing that's kind of an obstacle is price. Obviously typically doing more energy efficiency is more expensive. So if you're trying to have an affordable home, for those individuals between three hundred and three seventy five to 400, it's harder to do with the upgrades that are required in just the construction costs currently. Hmm, for sure.

Anya Chrisanthon 16:30

Now, Grace, I know you also work with a lot of relocation buyers, so can you share some of the best tips or advice for, home builders specifically who may have those clients that are relocating either from across the country or across state lines?

Grace Frank 16:47

Well, again, it depends on the age group of the demographic, but typically right now what I'm seeing in relocation are those early retirees that can work from home. Our area has a very high energy, efficient fiber optic system so people can easily work remotely from our area. All over, like our farm has fiber optics. We're out in the middle of nowhere, so. This whole region has a very progressive fiber optic systems for internet service. But when you have that, you still need to think about, okay, am I seeing more buyers that are downsizing? They want a nice house. They're looking at 2,500 square feet. But they wanna have single level, they wanna have an office, there's just a lot of factors right now that are coming into it where a standard two car garage was never really a problem and now more people want three car garage attached. Versus detached. Like I said earlier, they want that master on the main and another full bedroom on the main, or all of the bedrooms on the main and maybe only a bonus room over the garage as an optional second level.

Anya Chrisanthon 18:00

Yes. Now are you still seeing,, negotiations happening, for price? So you said obviously, price is a big thing right now with buyers. So do you still see, builders offering incentives and then. Maybe talk us through some of the best practices of negotiation with specifically new construction buyers. Because you don't wanna give away everything, right? Right. You still wanna be profitable at the end of the day, but, especially in the softening market, you do have to give something to make a deal.

Grace Frank 18:32

One of the things that a lot of builders have done is formed a relationship with a strong, lender. That they can offer, two, one buy downs or a lower interest rate. A two, one buy down does that. They're just offering, two years of a lower interest rate that the builder is willing to take that, buy down cost and. Give that to the buyer. Other, builders will do like 10 to $15,000 in designer features. So it really depends on if it's a spec home. Custom homes really are custom homes and there's not a lot of negotiation on that. And a lot depends on, is the builder developer doing a flat fee? Or are they working off of a percentage of, cost? I have a lot of builders that are focusing more on a flat fee because they're focusing that, why should I make more money when you decide to upgrade your faucets?

Anya Chrisanthon 19:31

Mm-hmm.

Grace Frank 19:32

So I think a flat fee model for new custom new construction is a great way and a lot of buyers are looking at that. But I would say that on custom, it's a lot smarter to have a designer that you're working with that can help with,, finishes for buyers. It makes it a lot easier.

Anya Chrisanthon 19:53

Yes, I mean, with custom homes, it's, the other spectrum of it, right? Like when you have so many choices, we can have a choice paralysis, it really

Grace Frank 20:01

becomes, a very big challenge. And we do help builders with that, with, optional site, options for selection. But the less you can get carried away with it in terms of too custom, but like. Here's like package one, package two, package three more that you can do that to eliminate a lot of confusion with selection is a lot smarter. Yes, absolutely.

Anya Chrisanthon 20:29

Grace. So what do you think is, there, a trend right now that you're seeing with home buyers specifically for new construction that you think a lot of builders are overlooking right now? We did talk a little bit about design. Is there anything else that you think that's, important for our builders to understand?

Grace Frank 20:48

Well, I think that how people are living right now is very different, and I am seeing a lot of people that are looking for, a secondary home that's on the property for a mother-in-law or a father-in-law that's kind of like a nice studio apartment, like anywhere from. 500 to 750 square feet that's available, that's, part of their property. I'm seeing a lot of that. And so you have to think about how you're placing homes where if somebody wants to add something like that. How you've done things like with, if you have to do septic or things like that, that you've thought through that If somebody wanted a secondary, smaller home on the property, pretty

Anya Chrisanthon 21:37

sure. Sometimes I wish I could build a secondary home on my property just to get away from them all.

Grace Frank 21:41

Yeah, there's a lot of, there's a lot of people looking for that right now.

Anya Chrisanthon 21:46

Yes, for sure. Now Grace, if you had to make one bold prediction for new construction sales for 20 25, 20 26, what do you think it would be?

Grace Frank 21:58

Wow. That's a really good question because, I always say go big or go home. And I think with builders right now, I, I believe that they really need to focus on how they're building for multi-generational options for people, but allowing the structure to be. Flow a little bit differently than they have been to accommodate different options for people, have more flex spaces that give people more options. It's not just, oh, this is a bedroom. So I think having more creative flex spaces, but also. Kitchens are huge for people and when you do not have enough countertop space or cabinets or things like that, it's a real turnoff. So I think if there's an area that. Builders really need to focus on it's, bathrooms and kitchens and how they flow and that they feel like they are. Wow. I love this. Right. But I think sometimes builders do not pay enough attention on the kitchen area, and I think that is huge. Right. I mean, kitchen

Anya Chrisanthon 23:18

is in bath. That what we say, that's sell, that's what sell. That's return on

Grace Frank 23:22

investment.

Anya Chrisanthon 23:23

Especially for somebody looking for new construction, I think you expect to see an elevated kitchen versus like what's out there right now. Even homes from two thousands, but they're outdated, design, et cetera. Mm-hmm. So yeah, that's a huge opportunity to stand out from resale homes specifically to, yeah. And

Grace Frank 23:43

also timelessness. Creating timelessness in a home. Mm-hmm. Not making it too trendy, but making it timeless. I feel that, timelessness and really focusing on how the kitchens are, how they flow into the entertaining area, and ensuring that you're thinking about multi-generational living. Yeah, great advice.

Anya Chrisanthon 24:09

And what advice would you give to builder sales team specifically who are trying to navigate the shifting market right now?

Grace Frank 24:18

Well, obviously they should be doing open houses all the time because right now a lot of buyers aren't selecting buyer's agents. They're going to open houses and figuring out what they like and what they don't like, and if you're not using open houses to learn about the market and what they think about the design and what they would improve on the design. You're really falling short. So I'm a big proponent of open houses. We do a lot of open houses. Open houses are great for mystery shopping, are great for focus groups, are great for getting people in the doors and so do more open houses.

Anya Chrisanthon 24:58

Definitely. Now, Grace, I know this question was not something that, we spoke about earlier, but now that we're talking and I can't help but be, curious, how has commissions, been impacted, if at all, since the lawsuit? Are you seeing that the agents are following the new rule where you're not technically supposed to offer the, the commission to the other side? Here I've been seeing some threads on Facebook saying that it's still happening. So can you talk a little bit about commissions? Have they increased, decreased, stayed the same, what the negotiation for commissions, has looked like on both. Specifically, you know, new construction of course, but I'm also curious on a resale side, 'cause that's obviously a little bit different there. Right?

Grace Frank 25:43

Well, really not a lot's changed. If you're successful as a strong listing agent, obviously you wanna ensure that buyers feel like the buyer's agent compensation is,, handled and that it's not something that they're paying. So most of the time when I'm sitting down with a builder or developer, I'm saying, in fact, there's times when. We actually increase the buyer's agent's compensation to make it more desirable for them to want to, think about your homes. And I've done that very successfully. When markets are odd, we can't place it on the MLS, but you can, you can still reach out to agents and tell them what the compensation is before they're looking at a home. We have a model where every Friday we email all of the agents our listings that are available and what the compensation is because we can do that. One of the things that's changed a little bit is buyers are a little bit like, what do I do? I'm not sure. I don't really wanna pay the compensation. So we have it very clear that we work with buyer's agents and we try to encourage buyers to understand that I will definitely show any of my own listings. And I do. And I've been doing that a lot more since the ruling came in. 'cause a lot of buyers are apprehensive about. Initiating a relationship with a Buyer'ss agent when they're really not sure what they wanna do, they're out there, not tire kicking, but figuring things out. I think, a lot really hasn't changed. It's just the format of how we communicate it and that's,, how we've handled it.

Anya Chrisanthon 27:29

Yeah. So it sounds like there is a good opportunity for home builders. To maybe incentivize some of those buyers and agents? Yes. Through extra commission potentially, yes. Very cool. Okay, so Grace, I don't wanna take any more of your time. I know we're right before the holiday here and everyone's gonna be going on their separate ways. So tell us, where can our listeners find more information about you? How they can connect with you? Is there a website? Do you hang out on social media? If somebody wanted to reach out, work with you personally or your team and, if they wanted to pick your brain.

Grace Frank 28:05

Yeah, Grace Frank group.com is our website. It's, it has a lot of amazing material. We have a great YouTube, channel. You can get to it, to that. We have podcasts where we've interviewed different investors and builders. We have a whole, location where they can learn more about new construction or relocation. Just if they go to Grace Frank group.com, they can learn about anything possible about our team and our approach to real estate. And, a lot about our neighborhoods that we work with. But we love to work with builders, relocation, developers. We help find land. We put weird deals together to create a development over time. So we're very creative about trying to get things to the next level with builders and developers. Very cool. So guys,

Anya Chrisanthon 29:00

make sure to check out Grace and her team for all of your real estate needs and grace. Before I let you go, was there anything that I did not ask you today that you think is important for our listeners to understand about any of the topics we discussed or didn't discuss?

Grace Frank 29:17

Well, I think a lot of people need to understand that, new construction is amazing because you get a lot of years of low maintenance if you're working with a good quality builder. And they have a great builder's warranty. But I think people need to remember that you should always have even a new construction home inspected because there's things that happen during the process that sometimes. You just, they just happen, you know? And so. New construction isn't perfect and you need to understand that, that, it's as close as you can get, but there will be challenges. And so get a home inspection still, work with a quality builder that's really committed to committing to you and that they, they really, respect their home warranty and they stand behind it. Yes.

Anya Chrisanthon 30:12

Great advice. Well, Grace, thank you so much for being on today's show. Thank you. It was, it was a pleasure to get to know you and thank you for sharing such great advice. I'm sure our listeners would appreciate, all the experience that you shared with them today. Thank you so much. Thank you. Bye-bye. Bye.