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Here's one sign of a thaw in the high-end homebuilding business in Charlotte: Simonini Builders is getting ready to start work on 11 speculative and model homes that average about $650,000.
For more than a year, builders have been reluctant or unable to get financing to build spec homes for the luxury market. Charlotte-based Simonini is ready to give the sector another shot. Still, these homes are smaller and less expensive than the homes they're known for.
Instead of the $1-million-plus variety, the company will offer houses that start around half that. "That really is what buyers want today when it comes to luxury," said company president and CFO Bill Saint.
Lenders apparently like that business plan, too.
The company has secured financing to build the homes in three neighborhoods: Ashton and Bellmore Hall in southeast Charlotte, and the Preserve at Robbins Park in Cornelius.
Saint said work on the homes will begin within a month, and the houses should be completed by May.
Consultant Chuck Graham, who tracks Charlotte's new-home market for builders and other clients, called the investment "remarkable good news" for the top end of the luxury home market.
Graham said Simonini essentially doubled the size of its potential market by building less expensive homes. The top 4 percent is $800,000 or more, he said, while the top 10 percent starts at $450,000. Simonini's new prices will make the homes affordable for the top 8 percent of buyers, he said.
The new prices also will appeal to those buyers who can still afford more than $1 million, but want to spend half that.
So far this year, Simonini has sold 18 houses for more than $750,000 - and three topped $1 million.
Where they're selling
We've written recently about other builders generating some success in this uncertain economy.
Ryan Homes pulled more building permits than any other Charlotte-area builder in the second quarter, and said sales were relatively strong in its Gilead Ridge neighborhood in Huntersville. In September, Pulte's Del Webb division sold a house a day at Sun City Carolina Lakes in Lancaster County, S.C., just south of Ballantyne.
Ryan sells to growing families, and Sun City Carolina Lakes is an active adult community. While upgrades and larger models cost more, base prices in both neighborhoods start at less than $200,000.
Simonini typically builds luxury homes for the top 4 percent of earners, and prices sometimes top $1 million. While the company has introduced the smaller, more affordable plans, investing in expensive speculative homes still is a leap of faith for a luxury builder.
In Bellmore Park, the spec homes will average about $700,000; in Ashton, about $650,000. In Robbins Park in Cornelius, Saint said, the average will be about $600,000 or even a little less.
The company will start with three homes in Bellmore Park, and four each in Ashton and Robbins Park. Homes will range from about 2,600 to about 3,400 square feet. Ashton is part of Olde Providence off Old Providence Road; Bellmore Hall is a gated community near Rea and Colony roads. The Preserve at Robbins Park is off West Catawba Avenue, not far from Birkdale Village. For directions, visit www.simonini.com.
An award for quality
Infrastructure - roads, entrances, pocket parks - are complete in all three neighborhoods. That allows potential buyers not only to see what the place will look like, but also be sure that amenities will be completed.
Neighborhood development was completed before the loans were secured for the models and spec homes, which also appealed to the lenders.
Simonini recently won the top National Housing Quality award from Professional Builder magazine, one of the industry's top honors.
To win, builders are judged in eight categories, including communication, planning and monitoring, customer service and, of course, home quality.
In the story about the honor, the magazine said Simonini's home-buying process and construction quality are the same for the new "right-sized" homes as for the larger, more expensive versions.
The look of the new models will be familiar: Exteriors will resemble the traditional homes in earlier Simonini neighborhoods such as Heydon Hall. Those homes were inspired by Myers Park.
But, of course, you can't just shrink a 6,000-square-foot house to half that size. (Not and put an actual bed in the guest bedroom.) Some rooms have to be eliminated, others have to serve multiple functions.
Saint said surveys of its customers showed they'd be willing to give up one bedroom to downsize. Say, from four bedrooms to three. They can do without a full, formal study if there's still a quiet spot for the home computer.
They don't require a traditional living room, especially if the trade-off is a larger great room.
They still want a separate dining room, though, and maybe even a larger dining room to accommodate dinner parties and the extended family at Thanksgiving.
