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Suburban housing rebound slow and steady

Enjoy the boom, but don't forget the bust.

That's the credo of suburban homebuilders and real estate agents as they experience one of the most robust housing markets in years.

There are plenty of reasons why more new houses are being built and more existing homes are being sold: Low mortgage rates, affordable home prices, banks more willing to lend money. It's also spring, traditionally the peak period of activity for the residential real estate market.

“Looking back five years ago, it's almost impossible not to do better, it was so ridiculously bad,” said Court Airhart, president of Airhart Construction, a homebuilder based in West Chicago.

Sales of existing homes hit 4.88 million nationwide in February, up 1.2 percent from January and up 4.7 percent from a year ago, the National Association of Realtors reported.

Yet, a recent roller coaster of housing news is prompting builders to proceed with caution. While groundbreaking on single-family houses nationally reached a 6½-year high in December, a cold, snowy winter caused starts to dip 17 percent in February, according to the U.S. Commerce Department.

Slow and steady seems to be the strategy.

Gone are the days of homebuilders hammering out 200 spec homes in a far-flung corn field. Today, builders are more likely to select smaller infill projects in established suburbs.

Gone are the days of McMansions. Many builders are constructing smaller homes to cater to first-time buyers and downsizing baby boomers.

Gone are the days of the colonial, with its sparsely used dining room and living room. Today, builders are using more open floor plans, where great rooms and kitchens connect. The most popular new room seems to be the “drop zone,” a tricked-out mud room with plenty of space to store coats, boots, soccer shoes, maybe even a washer and dryer.

“The last five years gave us a lot of time to evaluate what we were doing,” Airhart said. “We evaluated every house design and asked, ‘How does it fit the lifestyle of today's homebuyer?'”

The result is that buyers are seeing new houses of smaller square footage loaded with amenities such as wood floors, high-end appliances, specialty cabinets, spa-quality bathrooms, upscale windows and trims, and the latest wireless communication and entertainment technology.

Two groups of buyers are driving this trend: older millennials tired of paying rising rents and ready to raise a family, and baby boomers at or near retirement and looking to downsize.

“They're happy with a smaller home heavy on the amenities,” Airhart said.

Consider Airhart Construction's latest projects. Its Fisher Farm community in Winfield has 1,900-square-foot prairie style houses with open interior designs priced at $479,000. Its College Station development consists of 14 homes, roughly 2,000 square feet in size, within walking distance of a commuter train station in Wheaton. Those houses are priced at $359,000 to $450,000. Airhart also is selling newly constructed row houses and townhouses in Wheaton.

Similarly, Pulte Homes is completing a number of suburban projects with features such as drop zones, open floor plans connecting kitchens to living rooms, and a “planning center” off the kitchen that serves as a family home office.

Pulte's Easthaven in Buffalo Grove opened in February with 3,200 to 3,900-square-foot homes priced at $662,000 to $729,000. Legacy of Barrington, which also opened in February, has 3,300 to 4,100-square-foot houses from $659,000.

In Geneva, Pulte just opened Lincoln Square, with 2,300 to 3,400-square-foote homes priced at $374,000-$507,000. Also just opened was The Trails of Silver Glen in South Elgin, 2,400 to 3,500-square-foot homes starting at $359,000.

This month, Pulte is launching Hawthorn Hills Ranches, 1,700 to 1,900-square-foot homes priced at $379,000 to $399,000. And in May, Ashwood Heights will open in Naperville, with 3,300 to 3,900-square-foot houses starting at $509,000.

Like other developers, Pulte is focusing on building in closer-in suburbs rather than massive subdivisions on the fringes.

“Five to 10 years ago, we were thinking of building further west, north or south. Now, we're not necessarily thinking bigger and further out,” said Maria Wilhelm, vice president of sales for Pulte.

Toll Brothers also has a limit on how far out it will develop, said Keith Anderson, Midwest group president.

“Elgin is as far as we will go. We'd rather pay more for the land and build closer,” Anderson said.

Toll's Bowes Creek Country Club custom home development in Elgin is an example of how the builder is catering to the varying lifestyles of today's buyer. The project includes single-family houses and townhouses, which are targeted at everyone from new families to empty nesters. These housing units range in price from the upper $200,000s to the upper $300,000s.

Meanwhile, Toll Brothers is still appealing to the upscale single-family homebuyer with its custom homes at The Woods of South Barrington. These homes range in prices from $500,000 to more than $1 million and sit on large lots.

“We have products that appeal to all buyers, from families to active adults,” Anderson said. “Buyers are looking for high-quality homes with lots of amenities, which has always been our product.”

Area builders believe the improved economy is encouraging young buyers to abandon their apartments, and fence-sitting baby boomers to finally sell their houses and downsize.

“Sales have been steadily getting better since 2010,” said Chris Nickel, vice president of the Illinois Division of Toll Brothers. We think there is a renewed confidence among consumers.”

That outlook is echoed by Chris Huecksteadt, regional director of Metrostudy, a real estate research firm based in Elgin.

Metrostudy's 2014 study of the Chicago metropolitan area showed 5,708 new housing starts, a 17 percent increase over the previous year. It projects a slight increase for 2015.

“The question is whether of new home market can maintain its 2014 momentum into 2015,” Huecksteadt said. He forecasts 6,000 new housing starts in 2015 in the Chicago area, what he calls, “modest growth, but growth nonetheless.”

Brian Hill/bhill@dailyherald.comPatrick Luehring, left, hands Dan Olson, both of Woodmark, a nail gun while installing rafters as construction of town homes in Bowes Creek Country Club continues Tuesday in Elgin.
Brian Hill/bhill@dailyherald.comPaul Valasquez of Woodmark works on the roof of new construction of town homes in Bowes Creek Country Club Tuesday in Elgin.
  Construction crews work on a new home at Pulte's Hawthorn Hills in Hawthorn Woods. Gilbert R. Boucher II/gboucher@dailyherald.com
  Toll Brothers executives Chris Nickel, left, and Keith Anderson. Bob Chwedyk/bchwedyk@dailyherald.com
  Toll Brothers is building new homes at Woods of South Barrington. Bob Chwedyk/bchwedyk@dailyherald.com
  Toll Brothers is building new homes at Woods of South Barrington. Bob Chwedyk/bchwedyk@dailyherald.com
  Toll Brothers is building new homes at Woods of South Barrington. Bob Chwedyk/bchwedyk@dailyherald.com
  A bricklayer works on the stonework as construction crews work on a new home at Pulte's Hawthorn Hills in Hawthorn Woods. Gilbert R. Boucher II/gboucher@dailyherald.com
  Construction crews work on a new home at Pulte's Hawthorn Hills in Hawthorn Woods. Gilbert R. Boucher II/gboucher@dailyherald.com
  Toll Brothers executives Keith Anderson, left, and Chris Nickel in front of a home under construction. Bob Chwedyk/bchwedyk@dailyherald.com

Spring warms up suburban real estate market

Suburban real estate agents have a little more spring in their step now that the weather is starting to warm.

The long, cold winter discouraged buyers from looking at homes. Now that the snow has melted, buyers are out looking at listings.

“Spring started a little later because it was so cold. But now the warmer weather has brought out the buyers,” said Diana Ivas, a real estate broker with Berkshire Hathaway Home Services in Hinsdale.

Sales of existing homes were on the upswing in February, climbing 1.2 percent from January and 4.7 percent from a year ago, according to the National Association of Realtors.

If the short-term forecast looks better, so does the long-term outlook, Ivas said.

She remembers the lonely times in 2009, when the Great Recession put a crimp on the real estate market.

“There were times on weekends when the phone didn't ring,” she said.

Now she's busy most weekends.

“It's a good feeling when your phone is ringing and a potential buyer wants to know if you can show them a listing in an hour. I don't mind being busy,” Ivas said.

— John T. Slania

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