In March, Charlotte, N.C.–based Regent Homes inked 36 contracts, its highest monthly sales total in seven and a half years. The builder, which typically closes between 150 and 200 homes per year, is on track to close more than 220 units in 2011, says its president Ken Anson, which would represent a 32% increase over last year.
Dublin, Ohio–based Epcon Communities and its franchisees are expecting big things from a division Epcon started in the fall of 2008 to build detached condominiums. Epcon now projects that its detached product will eventually equal in annual sales the 847 attached homes its franchises closed in 2010. “There are a lot of land opportunities, lenders are friendlier to this kind of business model, and it’s easier for builders to deal with smaller projects,” says Nanette Overly, Epcon’s vice president of sales and marketing services.
Two builders on two very different tracks are finding ways to attract customers at a time when home sales and prices nationally continue to fall.
Regent builds spec homes in 12 active communities in North Carolina’s Triad and Charlotte markets, where, according to Multiple Listing Service data, 40% of all homes bought and sold go for less than $120,000. “We have educated consumers down here who are going to make you an offer that’s insulting,” laughs Anson.
By streamlining options and keeping its overhead down, Regent offers homes to first-time buyers with larger bedrooms, closets, and kitchens than its competitors’. Its homes, which range from 1,000 to 3,000 square feet, include an array of standard features, such as carpet padding upgrades, overhead bedroom lighting, elongated commodes, wood sheathing, floodlights, and jacks for electronics. The bulk of Regent’s sales are in the $120,000 to $160,000 range, although its smallest model starts in the mid $90s.
Regent’s plan this year didn’t call for opening any new neighborhoods. But when Builder spoke with Anson and his sales manager Steve Bailey last month, the builder was about to open its second neighborhood this year and had a third ready to go for July.
Bailey adds that his company has had some success lately targeting renters via monthly flyers.
One more option
In Charlotte, buyers have signed contracts for five of the 17 detached homes that Epcon is building in that market, one of several around the country where Epcon and is franchisees are placing these homes in or near existing Epcon communities.
In September 2008, Epcon created its first detached house plan and a year later started mixing detached and attached in some of its 30 communities. By 2010, more developers were asking for that product, mostly for infill projects. “At the time we were having an internal discussion about how many homes we’d need to build to make this work,” says Overly. Epcon concluded that the concept was viable if it could build at least 20 detached homes in a neighborhood.
“This is another option that our franchisees can get financing for,” she says. And it seems to be taking off. Epcon is working with seven builder partners, and is currently building detached homes in central Ohio (where it has 96 home sites for detached, most of which are expected to close this year), Pittsburgh, Forrest, Va., and Wisconsin. Overly says that land deals in several other markets are “pending.”
The detached houses range from 1,500 square feet to just under 2,700 square feet, and sell from the upper $100s to the mid $300s. Epcon recently added a bonus suite option to three of its four detached house plans, giving it seven stand-alone condo plans.
Depending on the location, detached homeowners may or may not have access to the communities’ amenities, such as its clubhouse, pool, or golf course. (That can be negotiated between the detached and attached homeowners associations.)
Epcon’s next step in this process, says Overly, is to help its franchisees identify opportunities for adding detached product to their markets.
John Caulfield is senior editor for Builder magazine.