Tribune - June 2008
For many Valley builders, launching new housing developments amid a languishing real estate market and ailing economy isn't an option.
Experts say most are still busy purging excess speculative houses.
But a few builders are bucking the trend and starting work on new master-planned communities with thousands of homes - betting the right price and location will entice buyers.
Tempe-based Fulton Homes opened sales today for its latest project, called Ironwood Crossing - a 2,100-home master-planned community near Queen Creek.
"Houses are selling if they're priced right, if they're in good shape and in a good area," said Dennis Webb, Fulton's vice president of operations.
Located at Ironwood and Ocotillo roads, the development is closer to the urban center than areas like Johnson Ranch and Florence, but it's still affordable, Webb said.
And price is key.
When Fulton began planning out the project three years ago, prices were originally set from the mid-$200,000s up to $450,000.
Now, houses start at just less than $150,000 for starter homes and reach up to $300,000 for a more-than-4,000-square-foot house.
The company was able to cut prices by redesigning the houses, Webb said. Laminate countertops became standard instead of granite. And 10-foot ceilings were lowered to 9 feet.
"It doesn't sound like a lot, but it makes a big difference," he said.
Fulton isn't the only builder moving forward on projects.
Blandford Homes recently started work on a 1,200-home development, called Mountain Bridge, at McKellips and Hawes roads in northeast Mesa.
"Just because the market is down doesn't necessarily mean it wouldn't be a good time to enter the market," said Ben Sage, head of Houston-based Metrostudy's Arizona division.
Some builders want to be prepared for the market's return. Others have poured so much money into projects, it's not that much more expensive to build some model homes, Sage said. In Blandford's case, the local builder isn't burdened by dozens of other communities like some larger builders, he said.
Fulton, a private company, also has an advantage over big public builders which must answer to stockholders, Webb said. Fulton is still profitable, he added.
"We haven't just given away houses because we had to," Webb said.
John Fioramonti, with Scottsdale-based Meyers Builder Advisors, said this is the first time he's seen Fulton offer homes less than $200,000. Even so, they'll be competing with dozens of other new-home communities and prices that are closer to $120,000, Fioramonti said.
"Queen Creek is just a tough area," he said.
Still, Queen Creek is well-positioned to feed growing employment centers, such as the Phoenix-Mesa Gateway Airport area in Mesa and parts of Gilbert, said market analyst RL Brown.
Blandford also has a good location, which is one of the last areas to build in that part of Mesa and is close to employment centers, Brown said.
"Everybody's commute-sensitive right now," he said.
