Although the home buyer tax credits have expired, builders and developers in the Chicago area are dangling generous incentives and price cuts to get buyers in the door. Steve Melman, NAHB’s director of economic services, said incentives are “fairly widespread” to keep the momentum going after the tax credits. “Many builders are offering upgrades that quickly begin to approach that value of the $8,000 first-time home buyer tax credit,” he said. “Or it could be a combination. They will upgrade appliances and help out with closing costs. That quickly begins to approximate the value of the $8,000 tax credit.” Bearing names like “a-MAY-zing Savings Sale” and “Trade in Your Home” program, Chicago-area deals offer sizable discounts on single-family homes, condominiums and town homes. In some cases, the availability of FHA mortgages with only 3.5% down sweetens the deal. “It’s a matter of giving people a reason to buy new,” said Paul Bertsche, vice president and general counsel at Chicago’s CA Development. “The competition is short sales and foreclosures.” Optima Old Orchard Woods in Skokie, Ill., which features 656 condominiums in three interconnected residential towers, is touting a “Better Than a Tax Credit” program with a $9,000 credit off the price of a condo. The credit can also be used toward closing costs, an interest rate buy-down, a combination of the two, or be applied to upgraded finishes, said sales manager Tara Hovey. “This was a way for buyers to feel they can still move forward days after the credit program ended, and feel they got a great deal,” she said. (www.chicagotribune.com)
Chicago Tribune (5/21/10); Jeffrey Steele

Like other builders and contractors, Gary Rochman, owner of Rochman Design-Build in Ann Arbor, Mich., reports his business is picking up a bit as customers feel a little more confident about the future, or at least not as fearful as they once were. It helps, too, that labor and construction materials costs are still relatively low. Home owners can often build custom homes and major add-ons for 10% to 20% below pre-slump levels. The housing crisis sidelined many skilled laborers. Eager to work, they’re willing to negotiate on fees. It’s the same with architects, designers and builders. “It makes a lot of sense right now,” said Stephen Melman, NAHB’s director of economic services. “People are available to do the work. They are going to bid competitively, so I’m sure that will drive the price down.” But the low-cost building and remodeling climate may not last too much longer. “Costs are still down but they’re starting to move up, so the window for taking advantage of lower prices is starting to narrow,” said Josh Baker, president of BOWA, a design and construction firm that focuses on large-scale add-ons and luxury renovations in the Washington, D.C., area. Once subcontractors start getting more work, labor rates will go up too, builders say. “The moment they get busier, the negotiating factor goes away. It happens very quickly,” said Luis Jauregui, an architect and builder in Austin, Texas. Rochman hasn’t raised his fees yet, but he recently hired back an architect he had laid off and this summer hopes to rehire two carpenters dismissed during the recession. Like most remodelers and custom home builders, Rochman reduced his overhead as business slowed in the housing downturn. To help win bids from a smaller pool of customers, he cut fees and reduced markups by about 10%. Clients are still enjoying discounts, including deals on land — for now. (www.investors.com)
Investor’s Business Daily (5/28/10); Marilyn Alva

It’s getting harder to find the words “rural” and “new home” in the same sentence as the Chicago suburbs gobble up land within a 40-mile sweep of the Loop and “New Urbanism” becomes the rallying call for land developers. But it is possible and, for many buyers, preferable. “We’re living our ‘happily ever after,’” says Al Flammini, who bought a house in KLM Builders’ Sunset Ridge Estates in Richmond in 2009 with his wife, Kim. “We have quiet and are away from traffic,” he says. “But we can go shopping or to Lake Geneva in 10 minutes. I can spend my time biking and kayaking.” Living away from Chicago is not a downside for the Flamminis, who traded their older Lindenhurst house for their new two-story house in Richmond. “It takes about 25 minutes now to get to our daughter’s house, but otherwise we have all we need out here,” says Flammini, who bought a model, in part because he liked the decorating. Country living isn’t for everyone, says NAHB, although Midwesterners crave it more than people from other regions (Pacific Coast folks are least likely to go rural.) “Nationally, 28% of buyers want ‘rural,’” reports Steve Melman, NAHB’s director of economic services. Caucasians are far more likely than are African-Americans, Hispanics and Asians to reject city life. Their reasons, says Melman, include solitude, lower-cost housing and open space. Thanks to wireless devices and home offices, he adds, many workers no longer need to report to their city offices daily. Age doesn’t matter, says Melman. About one-third of Midwesterners of all ages long for rural roots. But household income does separate city from rural; those with incomes in the highest brackets are less likely to want to head for the country. (www.chicagotribune.com)
Chicago Tribune (5/28/10); Leslie Mann

Scott Shimberg is used to taking a year or longer to build a custom house. It’s the way his family’s company has done business for more than 50 years. Now, he says, his homes will be popping up on Tampa Bay, Fla.’s vacant lots in as few as three days because most of the home won’t be constructed there. The well-known Shimberg family has always built custom homes the old-fashioned way. Now, the company, Hyde Park Builders Inc., is changing gears. The modular part of the business is going by Scott Shimberg Homes and has teamed up with another builder to construct 80% of a home off-site — in another state even. Customers will meet with the local builder and pick out design elements in South Tampa. Each time a section of the house is complete, it will be shipped to the home site. The entire house could be finished in as little as three months. “I kept wondering if there was a better way,” said Shimberg, who is president and chief executive officer of the company. “This way I can build a home in three months and avoid vandalism, theft and weather delays. Customers can sit in lawn chairs across the street and watch. At the end of the day, they will have a house.” This construction method, he said, will slash building costs up to 30%. With the sluggish economy and rising construction costs, Shimberg said this “helps make the numbers work.” Modular building is not new, said Steve Melman, NAHB’s director of economic services, but it is different to see a custom builder construct homes this way. Many builders, Melman said, are trying to cut costs by building some aspect of the home off-site. Some are simply dropping in constructed showers instead of tiling them on-site. Others, he said, are adding whole rooms. But Melman said he’s not aware of a builder like Shimberg completely changing its building method. “If this works, other companies will follow,” Melman said. “But it takes time for people to accept it. Home owners have to feel comfortable.”
(www.tampatribune.com)
Tampa Tribune (5/25/10); Shannon Behnken

Builder Mary-Dolph Simpson said she learned early on that treading territory in a traditionally male-dominated field could be a challenge. But after many years in the business, she said that she’s seen change in the perception that a woman couldn’t possibly know as much as a man about building a home. “From the male builder’s perspective, they take the plan and want to build what they see,” Simpson explained. “Being the female side, I hear what the woman needs” regarding space, storage and overall home-life design. “I can envision pretty much anything,” she said, adding that often she visits a family’s current home to better understand their lifestyle needs and preferences. She also assists greatly in the materials-selection process. The number of reported female-owned construction firms nationwide exceeded 201,000 in the U.S. Census Bureau’s 2002 Survey of Business Owners. According to NAHB, more women than ever are leading construction companies. “I think women builders can certainly relate with what people really want in a new home,” said Mark Edwards, senior vice president/broker of East West Realty in Suffolk, Va. “Research shows that women influence the purchase decision 86% of the time in the purchase of today’s consumer goods,” he said, “and it certainly holds true in the purchase of new homes. Women builders can bring a unique perspective that many of the builders that have been in the business for many, many years might not. Of course, there are excellent male builders. In fact, most of the ones we work with are predominantly ‘male-owned’ building companies. But if you take a closer look, they have someone female in the decision-making process or serving a very important role in their company.”  (www.pilotonline.com)
Virginian Pilot (5/17/10); Nora Firestone

The number of new homes in the Grand Rapids, Mich., Annual Spring Parade of homes grew this year, the first time since 2005 when the popular event reached 212 new homes, just shy of the 1993 record high of 228. The growth is slight — up to 45 from last year’s 42 — but it is growth nonetheless and a sign that builders are seeing more confidence in the marketplace. “People need to have confidence before they buy a house — more than any other purchase — and we believe confidence has quit eroding,” said Mick McGraw, president of Eastbrook Homes, one of the area’s largest builders. Six of the homes in this year’s parade are green-built, three have universal designs and prices span from $100,000 to nearly $1 million. “Right now, you’re really seeing people investing n affordable homes,” said Danielle Latack of the Home & Building Association of Greater Grand Rapids, which sponsors the event. Rich Kogelschatz, owner of Heartland Builders and president of the association, said people can see the market improving by driving through developments, where homes are under construction by a variety of builders. His company is among them, including a green-built, barrier-free home. “We’re breaking ground next week on a house, and we just finished two,” he said. “Overall, there is a sense of optimism. Not just myself, but in the public as well. But, pointing to stubbornly high unemployment numbers, he said the turnaround will be slow. In March, the Grand Rapids area had a 12.8% unemployment rate, higher than in February and March 2009. (www.mlive.com)
Grand Rapids Press (5/23/10); Cami Reister