Marty Gillespie is president of Heartland Homes, a custom home builder with more than 30 communities in Allegheny, Butler and Washington counties. Staff writer Gretchen McKay interviewed him about local real estate trends in new construction.
Home building permits were down locally by nearly 40 percent in the first quarter compared with the first quarter of last year. How has that affected Heartland Homes?
Our permits for the first quarter of 2009 were actually up 10 percent, which I think is due to a combination of several things. Our communities are in good locations, with some of the top school districts in Pittsburgh. In addition, our product is different. Home building is an old industry, where many are building houses the way they always did. We try to stay on the cutting edge with design and technology by including things like energy-efficient appliances, video surveillance, home theaters and high-tech security systems.
We also just came out with a new architectural style, the Craftsman, which has proved very popular. And we have a sales force and production group that's done a good job in a tough market getting people the houses they want. Traffic to our models is the same as last year, or about 20 percent more than in 2007.
How does today's new home market compare to the market a year ago?
There's some very good opportunities right now for people looking at building or buying a home because mortgage rates are low. Also, while prices in the rest of the nation are significantly down, our prices are actually about 2 percent higher than last year. So the Pittsburgh market, across the board, has really maintained its value. Prices will eventually go up quickly down the road in places like D.C., Tampa and Phoenix, and once that starts there will be a trend. The timing is good, then, for people in the market right now.
What part of our region has the strongest new construction sales right now?
We've been pretty balanced with sales in the north, south and west, though each region tends to appeal to a different buyer. The north, for instance, because it's a growing area with a lot of new businesses, is very popular for relocation. People who buy in the South Hills, conversely, are largely from the South Hills. They don't tend to move to other regions.
Are you offering any special incentives to buyers right now?
At Heartland, we do it a little differently. We don't just discount prices because we want to maintain values in the neighborhood. Instead, we offer different promotions each month that add value to the houses, things like hardwood floors or fireplaces or granite countertops. That way, pricing isn't all over the place. The house is a sound investment.
What amenities are new home buyers especially looking for? What's passe?
Hardwood has been very popular the last five years, along with granite countertops We're also seeing demand for morning and sun rooms and an extra bedroom over the garage. The footprint might be smaller, but adding a bonus room on the house gives it more character. Some people are also opting for third-floor finished areas in the attic.
Buyers aren't so focused on pure square footage anymore; rather, they're taking into consideration the livability and energy efficiency of a home. I think that trend will continue
What are the benefits of new construction versus older houses?
The biggest benefit to building a house is that you're going to get what you want right when you move in. If you buy an existing home, you'll probably spend a lot of money -- and time -- the first year on new carpeting, redoing the kitchen, painting, etc., to make it your own. New construction allows you to build exactly what your want, from day one. You won't have to put additional, significant money into it.
Also, mortgage programs on new construction are typically a little better than on existing homes, which gives you a little more buying power. And historically, the appreciation of homes is greatest during the first five to seven years of the house's life. After that, it plateaus a little more.
The cost of ownership is definitely less in a new home. We did in-house calculations last year and found on average, new homes are on average 30 to 35 percent more energy efficient than a home built 10 years ago.
Any tips for someone thinking about buying or building a new house?
Do as much research as possible. When people buy a new automobile, they compare car to car to car. But when they're looking at houses, surprisingly enough it's more about superficial things rather than the quality of construction and energy efficiency. Do the research and make sure you know what you're paying for. It's the biggest investment of your life.
RealTalk is a Q&A with experts in western Pennsylvania real estate. The column appears every other week in Sunday Real Estate NOW. To suggest a subject or for more information, contact Kevin Kirkland at email@example.com or 412-263-1978.