Local builders see impact of housing rebound

Housing demand is up in recent months. Many real estate professionals say multiple offers and mini-bidding wars on houses are becoming almost commonplace again, resulting in rising sale prices.

In Downers Grove, for example, the average sale price for single-family homes in February grew from $310,412 — after an average of 244 days on the market — to $362,268 in May with an average of 71 days on the market, said Lisa Wenzel, owner of Wenzel Select Properties Ltd., a boutique real estate firm in that community.

“People are realizing that the home industry is improving and they want to take advantage of it,” said Chris Naatz, vice president of sales for D.R. Horton Homes (www.drhorton.com), “and since they are finding that there are not enough homes on the resale market right now, they are approaching the homebuilders to see what they have available for quick delivery.”

Real estate brokers are also seeking out homebuilders to ascertain what move-in ready inventory they have as an option for their clients.

“We have sold several homes recently to buyers who have lost out on multiple bidding situations in the existing home market or have not gotten the foreclosure home they wanted and they don't want to lose out again. Besides, they have realized that buying a new construction home is simple. They can generally close in 30 days with our move-in ready homes,” Naatz said.

“Even homeowners who have not yet sold their home are feeling more confident because they are hearing that as long as they are realistic about their pricing, they will probably sell their home within a couple of weeks. So we are seeing them coming in our doors, looking for homes that they can close on quickly,” he said.

D.R. Horton's corporate policy is to always have quick delivery homes available, but it isn't always possible to keep pace with a hot market, Naatz said. Fortunately, last fall the company anticipated a hot spring market and started work on numerous “spec” homes in the Chicago area. In fact, it now has more than 100 homes available in ten communities around the Chicago area, with a few in its recently opened communities.

Ryland Homes (www.ryland.com) is also well stocked with move-in ready homes. It now has 26 homes in suburban Chicago communities that can close by the end of August, including single-family homes, townhouses, village homes and active-adult ranch homes with prices ranging from $132,450 to $351,930.

“There are many different buyers in today's market looking at new homes, including active adults, empty nesters, young professionals, singles, young families with children and first-time buyers,” said John Carroll, division president for Ryland.

“In order for us to remain a dominant player in the market, we have to be responsive to the demands of an ever-changing array of homebuyer needs. This includes buyers who want the benefits of new construction but do not have the time to wait for a home to be built,” he said. “We build quick move-in homes in all of our communities so we can offer many different choices of homes across the entire Chicago metro market.”

Carroll also said the company has seen an increase in Realtors in area communities looking for quick move-in homes due to the limited amount of used homes on the market to choose from.

“Buyers who have waited for their home to sell before looking for their next home are also looking for homes that can close within 30 to 60 days,” Carroll said. “Finally, during the summer months we see buyers who want to move into their new home before school starts. These buyers are looking for quick move-in homes, too.”

Deerfield-based Meritus Homes (www.meritushomebuilders.com) is also building a few quick delivery homes in its various subdivisions, particularly in The Reserve of St. Charles.

“I am actually a big believer in building exactly what someone wants instead of guessing, but in this case, we wanted to showcase this new plan and the opening of the second phase of The Reserve of St. Charles, and we knew that the market demand was out there because inventories are currently low and lots of people want to buy new construction,” said Brian Brunhofer, president.

“We have also seen transferee inquiries picking up recently, and many of them want to be able to move in quickly and not wait the five months it generally takes us to build a home,” he said.

Meritus is building a 3,300-square-foot home in the Reserve that will be available for late September or early October delivery. It is a Craftsman-look cedar and stone, two-story home on a half-acre corner lot, listing for $570,000. The home features four bedrooms and 3.5 baths in a traditional layout with a lookout basement and three-car garage.

Anticipating the needs of their customers, Gerstad Builders of McHenry (www.gerstadbuilders.com) is also building a limited number of move-in ready homes, according to owner Roger Gerstad.

One of the available homes is an 1,830-square-foot ranch home in McHenry with a walkout basement, two bedrooms, two bathrooms, a study and a two-car garage for $239,490.

The other is a 1,382-square-foot ranch in Poplar Grove with three bedrooms, two baths, a full basement and a two-car garage for $153,900.

Right Residential LLC (www.rightresidentialllc.com), a firm that buys and renovates foreclosed homes, also has some immediate occupancy homes available, but not many.

“Our goal is sell our homes within 72 hours of listing them,” said Chris Shaxted, executive vice president. “Between now and the end of August, we should have about 40 homes all over the Chicago area, available for occupancy.”

Since the Right Residential homes are older homes that have been made “like new” through massive renovations, buyers get the individuality and character of an older home in an established neighborhood, with all of the new bells and whistles of a new home, which adds to the homes' appeal, he said.

“We are seeing prices and even interest rates rising slightly as the pent-up demand from the past five years and the increasing consumer confidence hit the market,” Shaxted said. “People are realizing now that it is time to make some decisions.”