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Indiana's dream homes.

Developers and builders compete in the small but lucrative market.

Sawdust clings to 39-year-old Jim Lintzenich's polished loafers as he steps through his basement door outside to inspect the progress on his new home. "It seems to go slower and slower the closer you get to being finished," he says. "They've done a good job, though, really."

This month, Lintzenich, chief financial officer and executive vice president for USA Group, along with his wife, Marybeth, and three kids become the first family to move into The Hawthornes village. It's an exclusive section of Hamilton Proper in Fishers, the largest golf community in Indiana. Like them, the Lintzeniches' future neighbors will pay at least $500,000 apiece to live in The Hawthornes.

Although not a fanatic about golf, Lintzenich says his family found the idea of a golf course more appealing than water, a feature of their old home at Geist Reservoir.

"We wanted something as a central focus," Lintzenich says. "Golf is a game I've played for 25 years and I enjoy it. It's the kind of game you play all your life. I can see my son and I going out after work and playing nine holes." Lintzenich says his family shopped nearly two years before picking The Hawthornes.

Though the lower-priced villages in Hamilton Proper now have dozens of houses finished or under construction, the Lintzeniches are the first to invade Hamilton's higher-priced territory. "We were a little tentative at first about being the first, but I was confident enough about what they were doing at Hamilton Proper," Lintzenich says. He walks down the driveway, surveying the unbroken plots surrounding his. "It is a little lonely out here."

Even more exclusive in Hamilton Proper than The Hawthornes is the village of Overlook, in which homeowners will pay $750,000 or more to reside in one of eight premier lots. No family lives there just yet. Regardless, once one starts spending a half million dollars for a homestead, no expense need be spared, either in the construction of the house or in the backyard view of Hamilton Proper's wetland preserve and 18-hole championship golf course.

Families like the Lintzeniches are members of a small but lucrative slice of the Indiana home-buyer market, where dozens of builders and developers compete for favor. Last year, of all Realtor-assisted home purchases above $125,000, fewer than 2 percent were homes valued at $500,000 or more.

For builder Steven M. Hoss, who built both the Lintzeniches' home at Geist and their new place, such a customer is a rare find. While there is incredible demand for homes under $250,000, the high-priced home market remains a tightly contested battleground. Figures from the Metropolitan Indianapolis Board of Realtors show that last year just about 60 Indy-area homes priced above $450,000 were sold. Of those, only half were newly built.

Those figures may be somewhat misleading, points out George Sweet, president of Brenwick Development. He believes much of the "disappearing" upscale market is made up of custom homes not reported by boards of Realtors. "Because so many custom homes are built for consumers who go directly to builders, many are just not reported," Sweet says, adding that building permits might be a better gauge of the high-end market. "The drop might be less than is apparent."

Just who are these upper-end customers? According to builders and developers, they are 35 and older, highly educated and often part of a double-income family. They tend to have six- figure family incomes, which is a prerequisite to affording a house payment of a few thousand dollars a month.

The high-end real-estate market has slumped somewhat with the recession, but developers and builders agree that things are improving. "You've seen a lot of negative stuff in the news lately with the recession, so your older buyers have stayed where they are," says Gary Warstler, senior vice president for the F.C. Tucker Co. of Indianapolis. "But now you're seeing more good news, interest rates are down and the economy's moving. I think that's going to bring a lot of the big players into the market."

Much growth can be found in Northwest Indiana, where large numbers of Illinois residents are moving to Indiana. Bill Keith of Precision Construction in Highland says his company plans to advertise in several Chicago magazines to take advantage of the trend.

"Taxes in Illinois are just outlandish," Keith says. "A $150,000 house in Illinois you can get for $60,000 in Indiana. And I'm not even exaggerating. People from Illinois are making the move and they don't have the sticker shock." Many of the upscale buyers are moving into the Briar Ridge golfing community in Lake County. Homes there, says Keith, don't come much cheaper than $350,000, and many run well over $1 million.

Sweet says the appeal of a custom-built home stems in part from the worry-free lack of maintenance a new home offers. "People want new," he says. "They're thinking they don't have time to fool with the renovating an older house."

But for the price they pay, buyers of premier custom home expect a lot more than ever before for their money. "Buyers are very quality-conscious," says Roger Delagrange, president of Colonial Homes by Delagrange in Fort Wayne. Delagrange is developing Autumn Ridge, a golf course community in the Fort Wayne area. "They want all the bells and whistles: huge bathrooms, Jacuzzis, quality ceramic floors. They want all the special stuff."

Keith agrees that home buyers are pickier than they used to be. "We're seeing these upper-end consumers a lot more educated about what they want out of buying a home," he says. "We used to bring a customer in for six or eight design meetings, get a design ready and be ready to roll. Now it's common for a customer to drag out the decision-making process for three to eight months before they finally say, 'OK, yes, I'm ready to build.'"

Aaron Cohen is president of Centaur Consulting, which recently built a 32,000-square-foot custom home in Florida for Indianapolis mall mogul Melvin Simon. "We will sit down with the wife to find out if she's right- or left-handed and ask whether she wants the faucet on the left or right side of her vanity. We will see if she wears high heels and space the shelving accordingly."

High-end buyers are asking for more than ever before on the outside as well. Developers and builders have gotten the message. "The key to that higher-end market is the number of amenities you can offer a person," says Ernie Reno of Mansur Development, which developed Hamilton Proper. The development is a 900-acre community designed around a lush 18-hole golf course. "You can't just buy 50 acres; cut it up into two- or three-acre plots and call it a real-estate development."

Still, Sweet says the size of one's yard is not as much of a bragging right as it used to be. "You're seeing two things," he says. "One is a greater emphasis on quality. Smaller is getting better. The other is maintenance. I've been just amazed at the amount of house that builders put on our lots, but I've stopped being amazed because people tell us they don't want to maintain it. They want to be able to leave for the weekend. They don't think the houses are too close together. They think it's great."

Outside Indianapolis, where land is less expensive, developers have more room to work with. Joe Sullivan, president of Joe Sullivan Homes in Fort Wayne, has had no problem selling 10- acre lots. All but one of the 15 "mini-estates" in his development are taken.

"Everybody wants elbow room," Sullivan says. "But they want to be in a community, too. This gave them both. The lots were right inside a residential area, so neighbors had a place for their kids to go. I probably could have gotten by with half the land per lot. The interest was very high. I sold four lots before I turned a shovelful of dirt."

Consumers in perfect houses are demanding perfect neighborhoods. Successful developers research an area carefully before sending in the bulldozers; good school systems, favorable taxes and proximity to downtown shopping are all crucial variables.

Once R.J. Klein & Associates of Indianapolis finds such a location, it makes the most of it. Four R.J. Klein premier developments--Laurelwood, Coppergate, Winterwood and, most recently, Estancia--line up like peas in a pod along 106th street in Carmel.

"We like to get a new development started in an area that is land-locked on three sides, surrounded by already-established subdivisions, says R.J. Klein, president. "That way we don't run the risk of establishing high-end development in a place that hasn't already shown stability." Klein's subdivisions each have one entrance, for better security.

After developers select a site, they begin the monumental task of making the neighborhood as appealing as possible. High-end communities today spare no cost on amenities to please affluent residents, including landscaped common areas, fitness parks, fields, ponds and wooded nature trails. Brenwick Development incorporates pedestrian walkways into its communities to ensure residents can reach the neighborhood pool without a car.

A number of developers have accepted a new mission--protecting the environment in which they build. Some take great pains to install projects with minimal disturbance to an area's delicate ecosystem.

Bob Coolman, president of builder Coolman and Coolman, and Larry Hitz, owner of Century 21 Executive Group in Porter County, recently took environmentally conscious development to new levels with Walden, a project in Valparaiso. Coolman and Hitz sought assistance from the Indiana Department of Natural Resources in protecting the area's wetlands and preventing soil erosion. Surrounded by a 50- to 70-foot band of untouched forest, Walden contains homes built strictly of natural materials. No tree thicker than 6 inches can be removed without developer approval, and all residents must use a common pier to access the community's natural lake.

Builders must follow Walden's development ordinance, titled "Environmental Preservation Covenants and Restrictions." Utilities run in front of homes rather than behind, leaving the original backyard foliage untouched. So successful were the developers at preserving the area that it continues to be a suitable home for hawks listed on the endangered species list in the 1970s.

The biggest draw in upscale residential development is the golf community. Not only does the idea of an 18-hole championship course appeal to many doctors, lawyers and executives, but meandering fairways, trimmed greens and picturesque sand traps give residents a window view that's hard to beat.

"People like the leisurely, country-club atmosphere," says Jeff Thompson, developer with Thompson Land Co. in Indianapolis, which has sold 200 of 350 lots available in River Highlands in Fishers, a golf community on the market since 1989. "If you could have a golf course at your rear instead of another house, what would you choose?"

With so many developers and builders chasing the upscale consumer, some wonder if the market will dry up. Mansur is conducting a market research project to answer that question. "What we're doing in Hamilton Proper is typical of what successful developers are doing," Reno says. "The high-end market is extremely competitive. The big question I'm trying to answer is, 'How big is this pie?'"

Reno says golf ranks first among the reasons residents choose to live in Hamilton Proper, but not all developers see much demand for a golf communities.

"The lots next to some golf courses are appealing to some, but not most," Warstler says. "Generally there's not much privacy. Do you play golf? Have you heard the language they use? People don't want to be sitting out their porch listening to those clowns tee off."

Not a problem at Hamilton Proper, Reno maintains.

"The typical knock against golf course communities is that you're going to have golf balls banging into your house," Reno says. "That's not the case with us. The setbacks are far enough that privacy is not a significant problem. We knew a lot of people would try to copy us, and they have. You see other golf courses popping up all over. But they're much lower scale."

Housing development has expanded to become a broad, complex process. The distinction between home builder and land developer has blurred. While most developers investigate sites, purchase land and sell it to builders, developers like Centaur Consulting, Colonial Homes and Brenwick go further: they design and build many custom homes themselves, worrying about everything from meeting county sewer ordinances to not using nails in an interior library's wall paneling. Many developer- builders find that playing both roles makes them more competitive.

"We find it to be a real asset when we start a new development and we're trying to start a market," says Delagrange. "By immediately building a $333,000 house, we create a market for the upscale community. We start the trend."

Some upscale developers prefer closed builder communities, which require builders to submit all plans to the developer for approval. This allows developers some architectural control over their community of homes. A few developers go so far as to limit their land exclusively to four or five builders.

George Geiger, a partner with Shamrock Builders, looks to build in communities where many builders are permitted. "We find that the best investments lie in areas where there is competition between a lot of different builders," Geiger says. "There you're going to have better houses, and builders are forced to be a little sharper."

"We always welcome builders with sound architectural plans," Klein says, "as long as there's nothing really offensive about the architecture. We prefer not to have one section of colonial homes, one section of Victorian homes, etc. Different styles give you that royal estate feel, which is what we're after."

Jim Lintzenich strolls along a walk-around porch that surveys his backyard, where ample space has been left for a pool. His voice competes with squealing power drills and pounding hammers, as workers labor to finish the job before Lintzenich and his family move in.

"Hey, look at that; they screened in the porch." Lintzenich's cheeks flush as he winces at the cold. He clenches his gloved hands at his side, bracing his back against the wind. "I can't believe they'd want to screen a porch on a day like this."

But for what families like the Lintzeniches are paying, home builders don't seem to mind.
COPYRIGHT 1993 Curtis Magazine Group, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:real estate prospects in Indiana
Author:Murphy, Scott
Publication:Indiana Business Magazine
Date:Mar 1, 1993
Words:2408
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