Garbett Homes’ TerraSol neighborhood looked unlikely to be a success story last summer. First of all the home plans are ultra-contemporary, a rarity in conservative Salt Lake City. Second, the community is in a sketchy section of town. During site work last summer workers returned every morning to find vandalism and graffiti on everything, from signs to port-a-potties.
“We thought it was a risk,” recalls Rene Oehlerking, Garbett’s marketing manager. Instead, TerraSol has been a rousing success, with 50 homes of 60 sold in its first eight months. And they all sold at full price, with no incentives. “We can’t build them fast enough,” says Oehlerking. “We have even sold the models and are leasing them back. We expect to be sold out by summer.”
The homes’ modern designs ultimately became one of the community’s strongest selling points. “We get people who say, ‘Finally, a house we can put Ikea furniture in,’” says Oehlerking. Buyers who walk away because Garbett won’t negotiate on the homes’ prices tend to come back two weeks later when they can’t find anything else like it in the market.
But the community has an equally compelling second selling point, an energy-efficient package including geothermal heat pumps and solar panels that can bring utility bills down to as little as $5 a month. Then there’s the sales prices, which start at about $200,000 and rarely climb above $250,000.
It’s unlikely that Garbett Homes would have dreamed of developing plans for contemporary-style houses in the U.S. if it didn’t already build them in Mexico, where most new homes have a contemporary look. “People in Utah and Idaho saw the pictures (of the Mexico homes on the website) and started calling to say, ‘Hey, we want those homes,’” explains Oehlerking. “We thought these people must be in the minority.”
But after a year of consistently getting the calls asking for the Mexican homes, Garbett decided to develop a line of contemporary homes to try out in its Utah home market. “We decided if we were going to test this in our market that we should go outside of Utah to get an architect who can hold their own with this kind of thing,” Oehlerking says. Garbett settled on California-based KTGY Group, signing an exclusive agreement so other area builders couldn’t hire KTGY, too.
After a year in design, Garbett rolled out the new floor plans and elevations in Salt Lake City’s Daybreak community for the August 2009 Parade of Homes. It took orders for five homes during the Parade, despite having only one model. “In 2009 that was unheard of,” says Oehlerking. “No one was selling homes off plans. You had to build and sell specs. I can’t explain how successful it was.”
At the same time Garbett was developing the new contemporary designs, it also began to work on making its homes more energy efficient and sustainable. Noting that other builders were not having any success selling green and energy efficiency as upgrades, the company decided it needed to make the features standard and hold the prices at under $250,000.
At TerraSol Garbett added solar and geothermal systems for the first time to its offerings, lowering their HERS scores to the mid-40s. To keep the price of the new technology down, Garbett uses every possible tax credit available, employing two people to handle the related research and paperwork.
Reengineering the homes for energy efficiency also helped save some construction costs, which offset the additional costs for the new technology. For instance, the geothermal heat pump eliminates the need for a conventional furnace and air conditioning. And the 24-inch-on-center framing lowers lumber costs while increasing the homes’ insulation. “It has taken us a lot of homework,” says Oehlerking.
Learn more about markets featured in this article: Salt Lake City, UT.