“We didn’t want to just sit back on our heels and let the market dictate how we were going to perform,” said Mark Rodocker, executive vice president of KB Home’s Arizona division.
The Open Series is available at four of KB Home’s six communities in the Tucson region. The home at Sonoran Ranch on the southwest side is priced at $89,999, making it the lowest priced new home in the market. That price buys the base model 961 square-foot, two bedroom, one bath home.
 The Open Series by KB Home is an effort to compete with foreclosures, and offer affordability. Joe Pangburn photo |
KB Home says the studies revealed buyers are looking for flexible floor plans giving them options to add or subtract bedrooms, multi-use spaces and storage areas. Up to 40 percent more living space can be added to the base model of a home on the same site. The Open Series are also built to Energy Star guidelines.
“The response from our homebuyers has been tremendous. We’ve seen a large increase in our foot traffic.” Rodocker said. “The combination of affordability, flexibility and energy efficiency is exactly what today’s homebuyers are looking for in a new home. And they are thrilled to discover that they can afford to build a brand new home just the way they want it.”
John Strobeck, whose firm Bright Future Business Consultants tracks Tucson data for the home building industry, said two years ago he never would have believed a new home would be for sale for less than $90,000.
“I think it is incredible and I’m tickled to death to see a product like that come out,” Strobeck said. “We are looking for affordable housing and here is a product most anyone can get in.”
This was the step the industry needed to take in its battle against the foreclosure market, he said.
“Last month, the median foreclosure sale was in the $130,000 range,” Strobeck said. “So we absolutely have to come down below $150,000. And it would be nice to hit somewhere around $130,000.”
Strobeck said he believes the low base price provides the shock value needed to get people in the door, though he anticipates most people will add upgrades and make changes and probably wind up buying a home in the $100,000 to $120,000 range, which still keeps it below the foreclosure median.
Strobeck says he doesn’t see the new homes adding significantly to the industry’s problem of too much inventory.
“We aren’t going to add enough through new homes this year to add more than a couple of days to our inventory,” he said. “This keeps people employed. Having these options keeps the subs employed, which is great for the economy right now.”
Besides KB Home, DR Horton and Pulte Homes are offering new homes starting at $99,990. DR Horton’s home is available in Rancho Valencia, near Interstate 10 and Valencia Road. The Pulte offering is in Red Rock in Pinal County. Also, Richmond American is offering a home starting at $109,000 in Valencia Reserve, near Valencia Road and Alvernon Way.
“Two years ago we had no homes sell for under $150,000,” Strobeck said. “Last month 14 percent of the homes sold for under $150,000. We are trending downward and I am for that.”
KB Home’s Rodocker said he believes the Open Series will be here to stay even after the market picks up.
“We’ve seen a great amount of traffic so far and we are pleased with the results,” Rodocker said. “I think we have found a winner for the long term with this.”
In addition to Sonoran Ranch, KB Home is offering the Open Series at Presidio del Cielo in Sahuarita, Santa Rita Ranch II in Vail, and Rancho Valencia near I-10 and Valencia Road.
Foothills condos auction
As many as 58 condominiums in the Catalina Foothills near Sabino Canyon could go up for auction next week — 16 of them of them for sure, without a reserve price.
The two- to three-bedroom units at the Villas at Sabino Canyon, 7255 E. Snyder Road, will be auctioned at 6 p.m. April 28 at the Doubletree Hotel, 445 S. Alvernon Way. The auction will be done J.P. King Auction Company, Gadsden, Ala.
The community has total of 112 total units and is smaller than most in the area but each has a view of the Catalinas.
“The auction business is busy right now,” said Craig King, president and CEO of J.P. King. “There are a lot of people with an overhang of inventory on the market right now. They see an auction as a way to get rid of a lot of inventory quickly.”
Developer Grant Cardone said he was looking to get the properties moving quickly and he’s anticipating they will sell for well under their market values.
The first 16 will be sold to the highest bidder, who will select the condo he or she wants for that price. Then the bidding will start on the next unit, and so on. Some of the units currently have renters in them and could be bought as income property.
Once the first 16 are sold, it will then be up to developer Cardone to determine whether the auction will continue.
“Basically, I need the cash for other projects I’m working on,” Cordone said. “After the first 16 go, we’ll decide then if I want to sell the rest of them. My goal though would be to sell the whole project.”
King said his company hasn’t held an auction in Tucson yet, but that he has marked Arizona as a growth market for J.P. King Auction Company.
“When the market turned it turned quicker than the builders could stop building,” King said. “The sooner that we can sell these and the market absorbs them, it can come back quicker. People will always want to move to Arizona.”
The units at Villas at Sabino Canyon can be viewed ahead of the auction. Call the sales office, at (520) 529-1513 for information.
Development extensions
About 200 projects in Pima County are now eligible for development extensions after the Board of Supervisors voted April 14 to allow the director of Development Services to grant them. The extensions cover development plans, tentative subdivision plats and type II grading permits. Additional fees are associated with each of the extensions.
The extensions will be allowed as of May 15. For a cost of 25 percent of the initial approval fee, developers can extend current projects for an additional year. For the initial fee plus 25 percent, developers can obtain a two-year approval of the plans. Currently plans are only approved for one year.
“We were hearing people interested in doing this and they have been extremely supportive,” said Chris Poirier, administrative project manager with Pima County Development Services. “The fees we charge are small compared to the cost the developer would lose if they had to pay consultants and engineers again for the same project. It was also wasteful on our end for a project to have to come through because we already reviewed it and it passed.”
The City of Tucson last month also approved a plan authorizing what it called protected development right status on 83 developments nearing expiration. The city’s plan allows developers to file for an extension of three years on unphased projects and five years on phased projects.
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Comments
Hector Juarez wrote on Apr 29, 2009 8:00 PM:
Lilly wrote on Apr 24, 2009 12:55 AM: