By Nancy Stancill, The Charlotte Observer, N.C.
Feb. 28--Builders in the Charlotte region are downsizing floor plans or offering lower-cost finishing options to shave house prices and lure buyers in today's sagging economy.
And price-sensitive buyers are choosing Corian over granite, carpet in lieu of wood floors or a cozy ranch instead of a massive two-story.
It's a reversal of a national trend. Just a few years ago, bigger was better and buyers pounced on pricey extras. But in 2008, the economy worsened and new-home closings in the eight-county region dropped 42 percent. Sales of the most expensive properties lagged the most.
So in the last few months, builders -- ranging from value-priced Mattamy Homes to luxury-home specialist Simonini Builders -- have gone back to the drafting board, experimenting with a variety of techniques to get prices down.
"Two or three years ago, buyers wanted larger homes, just like they wanted to drive SUVs," said Mark Baldwin, executive vice president of the Home Builders Association of Charlotte. "Now, people are looking at price closely, and builders are finding ways to make houses more affordable."
Canada-based Mattamy Homes, which builds in eight neighborhoods in the region, recently started offering a 1,600-square-foot ranch starting at $173,990 at Enclave in southwest Charlotte. Four sold quickly, said Carolinas division president Bill Kiselick.
"When I first got into the business 25 years ago, houses were fairly small, then moved up," he said. "Now you're seeing the pendulum swing back."
Phil Griffith, 59, and his wife will move into a new three-bedroom, two-bath ranch in Enclave in May. The cost: $185,000 for just under 2,000 square feet.
The Griffiths, who had rented for three years, hope to stay in the one-story house when they retire. "Now is a good time to buy," he said. "We hope to get an interest rate below 5 percent when we close."
Census data released last year showed that the size of the average U.S. house increased from 2,095 square feet in 1992 to 2,434 square feet in 2005 -- a 16 percent jump. Plenty of so-called McMansions were also built. But household size is decreasing as more homeowners enter retirement or live alone.
Mike Larson, a real estate analyst with Florida-based Weiss Research, said builders across the country are adjusting to economic reality by pushing down prices.
"During the housing boom, when buyers were flush and credit was easy, they wanted larger, more flamboyant houses," he said. "Now they're pinching pennies, and they want smaller, less ostentatious homes."
Kiselick said his company, whose houses range from 1,600 to 2,800 square feet, is dusting off old plans, wondering, for instance, if it's time to build a 1,400-square-foot house with a one-car garage.
Two local builders, Waddell Homes and Colony Custom Homes, are putting up compact, one-story houses in the Riverwood neighborhood of Rock Hill. They're aimed at empty nesters, but single professionals and young families are interested, too, said Cynthia Howard, who heads marketing for Waddell.
The 60 brick ranches, starting at 2,000 square feet, will range from $240,000 to $310,000, with features such as tile floors and crown molding. "Two-thousand square feet works just fine to live in, pay taxes on and heat," she said.
Peter Harakas, who heads Colony Custom Homes, said he builds only ranches, mostly in Gastonia. He's slashing prices by $10,000 or $15,000, mostly by cutting out bonus rooms.
'A value market'
Atlanta-based Pulte Homes is also trimming prices with "a la carte" options instead of scaling back house size, said Mark O'Brien, a Charlotte-based Pulte vice president. He noted that in some cases, Pulte is increasing square footage by adding upstairs space in lieu of a two-story great room, for instance.
He said Pulte, which builds in 15 neighborhoods in the region, is lowering all base prices. For example: the starting price of a home in The Villages at Ardrey Kell in southeast Mecklenburg is about $197,000 instead of the previous $220,000, because of less expensive standard features.
"A first-time homebuyer is more willing to take a house with a vinyl floor and laminate countertops to bring the price down," O'Brien said.
"In Atlanta, the market is much more about glitz," he said. "Charlotte is very much a value market, very conscious of price per square foot."
That describes Jeffrey and Kelly Van Daley, who moved in December to a 2,800-square- foot, two-story home at Pulte's Belair at Carolina Lakes neighborhood in Indian Land, S.C.
The Van Daleys wanted a four-bedroom house. But they kept the cost at $247,000 by choosing some thrifty options: medium-grade carpet on the second floor instead of wood, and Corian sinks in bathrooms instead of granite.
"Other builders were throwing in stuff we didn't want," Jeffrey Van Daley said. "I feel like we got an outstanding deal."
'Usable and efficient space'
Simonini Builders held a large Realtor open house recently at Christenbury Hall, a gated neighborhood in Cabarrus near Concord Mills Mall.
One house was a 4,000- square- foot model starting at $639,900. That's smaller and less pricey than Simonini usually builds. Ray Killian, co-owner and chief executive officer, said the company's average price is about $1 million.
Simonini has resized some of its popular models and anticipates building more homes in the $600,000 to $800,000s as it opens several neighborhoods this year, he said.
"Buyers are looking for more usable and efficient space," Scott Teel, sales and marketing director, said. For instance, most buyers would rather have a big kitchen area than a formal living room.
"There are going to be a few less investment bankers and a few less entrepreneurs," said Killian. "Lower-priced homes are going to be more appealing this year."
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