Not so long ago, back in the pre-recession days when average new-home sizes had climbed well beyond 2,000 square feet, bigger is what sold houses. Now, with new-home sizes shrinking to match disappearing jobs and smaller salaries, the roomy floor plan has been pulled from most builders’ tool boxes, forcing them to learn to sell small, or at least smaller, even as they compete with older, but bigger, foreclosed homes.
The shift requires builders everywhere to find new selling tools and sharpen old ones in order to sell anything at all. In that spirit we offer 10 examples of communities around the country where builders and developers have been successful at selling smaller homes. By smaller, we mean communities where the average size of a home sold is less than 2,000 square feet. By success, we mean that they are selling at or near the top of the local markets they are working in. And by houses, we mean, single-family homes for the most part, with a couple of exceptions made in markets where multifamily new homes are more common. Hanley Wood Market Intelligence and John Burns Real Estate Consulting helped us find these local smaller-home, best-selling communities.
We whittled the choices down using more subjective methods, selecting builders who had compelling success stories and/or interesting and attractive floor plans and products. It’s likely no surprise that most of the major buyer drivers for success were nothing new—location and price.
Glass “tree” houses sell in suburbia.
Living in glass sky boxes withfloor-to-ceiling views of forest preserve in your front yard and of the Chicago skyline in the back has its appeal. The three, 20-story glass towers, incongruously named Old Orchard Woods and planted in the former prairie suburbs of Chicago, have averaged roughly 7 1/2 sales per month since they opened in late 2004. Sales happened even faster in 2009, with an average of 20 per month from September through November of last year. Of the 665 units, 75 percent are sold.
“The views from inside the homes are a big selling point,” says Tara Hovey, sales manager for Optima, a company owned by her architect father and her mother. All the units have floor-to-ceiling windows overlooking either Harms Forest preserve or the Chicago skyline.
Located just off of I-64, the project is situated centrally for couples who may work in different directions; it’s midway between the city and the suburbs.
One reason Old Orchard Woods kept selling steadily through the housing downturn is that home sizes within the building could adjust to the market. The architect/owner focused on three-bedroom units before the market slide and then turned his attention to less-expensive one-bedroom units as the market declined.
“Instead of just having homes at $257,000 for a one-bedroom, we have sold homes up to $2.2 million” to buyers who bought three units and linked them together, Hovey says.
The common areas add another selling point. The entrance to the three buildings is on the forest preserve side, as is a 75-meter indoor pool with two-story–tall windows that overlook the forest.
“There are no others [developments] like ours here,” Hovey declares.
Project: Old Orchard Woods
Location: Glencoe, Ill.
Builder: Optima Homes, Skokie, Ill.
Rate of sales: 7.49 per month
Price range: $257,000 to $1 million
Product type: Condos