New Home Construction on the Rise in Southern Georgia
Wednesday, May 18th, 2011
Residential construction activity continues to improve in southern Georgia. Growth was limited in 2010, but it was a much better year for new home builders than 2009.
Low appraisals have been an issue. Existing homeowners whose property appraises for less than the outstanding mortgage balance find themselves unable to trade up to a new home. However, Chris Strawn, division president for custom home builder America's Home Place, Inc. believes these issues will “start to self-correct by end of this year or mid-2012.”
“The appraisal issues that have been a factor in northern Georgia are creeping into southwestern Georgia this year,” Strawn said. “But we are already seeing improvement in northern Georgia and I believe that will be the case here soon.”
Taking a consultants’ approach
Tighter lending is part of the new reality in purchasing a home. Many new home buyers are aware of what it takes today to qualify for a mortgage and have worked hard over many years to establish a strong credit record and cash reserves. However, others are not prepared for today’s lending requirements. According to Strawn, homebuilders now take a consultants’ approach with this type of client to educate them on how to qualify for a bank loan.
“We talk to people about paying bills on time, not running up credit card bills and maintaining the kind of lifestyle necessary to establish good credit,” Strawn explained.
This type of counseling furthers slows an already long sales cycle. In 2008 and 2009, before banks tightened their home lending, it would take two to three weeks to complete the purchase of a new home, according to Strawn. In 2010, the time to wrap up a contract on a new home was four to eight weeks. Some potential buyers need six to 24 months to establish a strong credit record.
“It’s a challenge working with some clients to get to a point where they are able to purchase a new home, but it’s also exciting. You really feel like you’ve helped them fulfill their dream and it definitely leads to stronger relationships,” Strawn continued.
Downsizing
Whether a customer walks through the door qualified for a loan or it takes 24 months to get to that point, the type of home being built is also changing. Most clients are downsizing.
“Rather than buy a 2,500 square foot home, many are opting for 2,000 square feet,” Strawn said.
Clients who own land and have cash for a large down payment often include more of what they want in terms of upgrades when the home is built. Upgrades can include hardwood floors, ceramic tile showers or stainless steel appliance packages.
“Upgrades don’t factor into an appraisal typically. So unless a client owns the land or has cash, they will upgrade it later,” Strawn explained.
A people business
America’s Home Place has been in the custom home building business for nearly 40 years and in Albany for 18 years. Their focus is on building custom homes for families who have their own land, with home plans ranging from the $80,000's to $300,000+. America's Home Place has a network of Building Centers and Model Centers in Georgia, South Carolina, North Carolina, Tennessee, Florida, Alabama, Kentucky and Mississippi. According to Strawn, the company takes customer relationships seriously and is committed to working openly and honestly with clients.
“It’s really a people business and a lot like dating. You need to shop around and find the builder who is right for you,” Strawn said.
More information on America’s Home Place is available at www.americashomeplace.com.
