September 2008
Source: Virginia Builder Magazine, vol.21 No. 7

One way builders and real estate agents in Virginia are addressing economic woes in the housing industry is to draw more attention to myriad affordable homes in the state and letting first-time home buyers in on the "secret" - new and existing homes are on the market and they are within their reach.

From eye-popping incentives such as $6,000-plus prize packages and paid closing costs, builders, developers and real estate agents are getting creative when it comes to wooing potential buyers and, at times, leaping Herculean development hurdles in the process. Here are a few ways Virginia builders are standing out in today's challenging housing market.

Development hurdles challenge affordability

Frank T. Ballif, a Charlottesville-based builder for nine years who founded Southern Development Homes, is known for building fine homes in central Virginia, including infill projects that have had their fair share of challenges.

A portion of the property for one project, Willoughby Townes, had been used as an illegal dump site for more than 40 years. Before the company made a move, it first had to clean up the site, which involved the costly task of removing hundreds of truckloads of illegal fill.

Even with those early development challenges, the 46-home urban Charlottesville community close to the University of Virginia offered buyers a variety of floor plans ranging from 1,400 to 2,000 square feet of living space, while remaining around $300,000.

The company's more-upscale Brookwood community of 17 single-family homes and city villas claims the same convenient location and craftsmanship. Southern Development encountered a major challenge in building affordable housing here due to the surrounding community's desire to have a challenging road connection built through Brookwood to create better access to a nearby main road.

Building hte road was a significant benefit to both communities. However, it more than doubled the expenditure of the site work given the unwiedly topography and rock excavation required. That connector road, while an advantage, translated into more expensive homes.

Southern Development maintains localities could help builders construct more affordable housing by decreasing review and approval timeframes for new development plans. Every day of review time results in higher carrying costs for the developer/builder. Often rezonings and site plan reviews take three to five years, and this is reflected in a higher final home sale price.

Southern Development's average sales price is $330,000, notes Ballif, but he's challenged to deliver that price point in the current regulatory climate. Escalating fuels and asphalt prices in the last several years, as well as spikes in the price of building materials, remain obstacles to keeping prices affordable. Getting the neighbors and the government on the same page is often difficult, as well.

Even with the more price-senstitive market and tighter lending environment, Ballif says the company is enjoying its best sales year yet. Southern Development already sold 33 homes, compared to 27 sold all last year. He attributes growth to price, location and to the Base Realignment Act that affects the nearby National Ground Intelligence Center, which promises to bring in 1,200 jobs in the next five years.

. . .

To view the entire article, please click here to visit Virginia Builder's website.