Builders try to spur new-home sales with a variety of promotions

It's the time of year for gifts, and home builders are ready to give -- in order to receive.

It's no secret that 2007 has not been a good year for home builders. And the holidays are rarely boom times for these major purchases.

It is predicted that 18,000 single-family and townhouses have been started in the Chicago area this year, almost a 50 percent decrease from 2005, said Chris Huecksteadt, Chicago director for Metrostudy, a research firm for the housing market.

To encourage buyers, home incentives are abundant -- from very first homes to dream houses.

While most builders are taking the traditional approach of reducing prices on extras or options, or on homes that are already built, some are getting creative.

Take Glanvlle-Koshul Homes, for example.

This builder has four houses for sale in Wheaton and Glen Ellyn -- all for more than $1 million.

The company proposes buyers trade in their existing homes, a promotion that has worked at least once so far.

"You buy one of their houses, and they'll buy one of yours," said Joann Coghill of Keller Williams in Wheaton, one of two real estate agents representing the builder.

To make this work the home buyer's house must be priced under $700,000.

"The builders are going to be fair, but you can't say buy mine high and I'll buy yours low," Coghill said.

Cindy Buccholz of Koenig & Strey in Glen Ellyn also works with the builder.

Other builders agree that the difficulty in selling existing homes is holding some buyers back.

Empeco Custom Builders is promoting two offers for their homes priced from $1.2 million to $2 million including lot until Feb. 15.

In the first option, the company will fix up a buyer's existing home to make it sell more quickly. Empeco will charge for this, but refund the money when the buyer closes on a custom home from the company.

A second choice is to have the builder pay the mortgage on the buyer's existing home for up to one year.

The company builds in Cook and Lake counties.

KLM Builders Inc. is offering a rent-to-buy plan for three existing townhouses at Woodland Ridge in Antioch.

Half of the rent for a year will go toward the down payment. However, you'd better be pretty sure you want to buy that home and will be able to close because the $7,000 paid upfront is not refundable, and the price is higher.

Another option at this community is a 5 percent interest rate for three years, and owners can make interest-only payments.

One townhouse is $234,900 with KLM's financing option, or $249,900 with the rent-to-buy option.

Buyers at Chelsey Crossing in Gurnee receive a $20,000 voucher at Toms-Price Home Furnishings, which has a store in Lincolnshire.

Keith Jacobs, president of Jacobs Homes, said buyers of new homes often wonder whether their old furniture will look right in the space.

Prices in the wooded townhouse community start in the mid- to upper-$300,000s.

The tendency to discount inventory homes -- those that are already built -- is one reason such incentives are not expected to be around next year. If sales do not improve, builders are unlikely to start homes before they are sold, industry experts say.

In Elgin at West Point Gardens, both townhouses and single-family homes ready for occupancy come with price breaks.

For example, a four-bedroom Templeton with a porte-cochere, 9-foot ceilings and a home site on a pond is available at $412,275, down $40,000. The buyer could still make some interior selections.

Joe Keim Builders is offering $30,000 off for buyers who can close on single-family homes at Deerbrook in Aurora before the end of the year.

These include a four-bedroom Brighton plan priced at $393,000. It features 3½ baths, a three-car garage and 10-foot ceilings.

A ranch home -- the Deerbrook -- is priced at $316,500 including a lookout basement with a 9-foot ceiling and a whirlpool bath in the master bathroom.

Focus Development also has existing condominiums at Courthouse Square in Wheaton with $10,000 discounts. The condominiums in this first building are priced from the $240,000s to the $430,000s.

The company also is offering $10,000 discounts -- or a second parking space -- at Palatine Place in downtown Palatine.

Edward R. James has single-family homes ready for occupancy at Waterbury Place in Buffalo Grove. The price of the Essex is down $36,000 to $789,900.

In the spirit of the season, Norwood Builders is encouraging buyers to bring in 10 nonperishable food items before Dec. 22 to earn $5,000 off a home.

The company is building luxury attached homes in Mount Prospect, Roselle and Skokie.

Special prices also are available through the end of the year in Mount Prospect and at Park Street Crossing in downtown Roselle. Prices start the low $200,000s.

Lexington Homes has set the base price of the Chestnut floor plan at Willow Place in Wheeling at $315,000 until the end of the year. That's down from $350,000 for the three-level townhouse.

Including options with a home is a traditional way of spurring sales without cutting base prices.

J. Lawrence Homes is offering 20 percent to 70 percent off options in single-family homes from the $280,000s at Midlane Club in Wadsworth and $230,000s at Silver Leaf in Joliet through the end of the year.

Since financing can be an important part of a home's price, Lakewood Homes has signed on to G.I. Loan for Heroes, a program of the Illinois Housing Development Authority.

This includes a second-mortgage of 20 percent of the loan amount that is interest free.

Active-duty military personnel who are first-time buyers and veterans -- whether they're homeowners currently or not -- are eligible.

Lakewood Homes is building in Plano, Joliet, Hampshire, St. Charles and Carol Stream.

Hampshire homes start in the $160,000s.