It’s spring and everything is coming up green — including a number of new homes dedicated to energy efficiency and environmental sustainability.

While green is becoming a more embraced term it still is not easily defined and means different things to different people. There are shades of green found throughout the home building industry.

A truly green home would likely be considered those certified through an independent program such as Leadership in Energy and Environmental Design (LEED).

The program offers verification from an independent third party that certain requirements such as sustainable site development, water savings, energy efficiency and green materials were met in building or substantially remodeling a home.

Patrick Coveny, chairman of the Energy Efficiency & Green Building Initiatives for the Home Builders Association of Illinois, says when most consumers think of green homes they are thinking energy efficiency.

A Green Home Builders and Remodelers Study recently conducted by McGraw-Hill Construction in conjunction with the National Association of Home Builders and Waste Management says in 2011 17 percent of residential construction would be considered green. That number is expected to grow to between 29 and 38 percent by 2016.

What’s driving the change?

While consumers are increasingly more educated and interested in efficiency and saving money on bills, Coveny says state codes are largely behind the green movement in Illinois.

While Illinois was not among the early adopters of a green movement, in a short span from 2006 to 2012 codes will increase energy efficiency in newly built or significantly remodeled homes by 30 percent.

“No other state has increased their energy efficiency so quickly,” Coveny says. “We’ve gone from zero to 100 miles an hour here,” says Coveny.

John Hall Custom Homes Inc. prides itself on being on the leading edge of products and building that can make homes more “green.”

In the 1970s John Hall Sr. was the first builder certified by the Department of Energy to build a passive solar home in Illinois. John Hall Jr., co-owner, says they built several homes with that system and over the years have continued to build homes to be as energy efficient a possible.

Saving energy

Coveny says studies have shown that when homebuyers think green they are primarily thinking energy efficient and that sustainable materials is far down on the list.

While most people think of Energy Star as a sign that an appliance is energy efficient, Energy Star 3.0  is the latest program from the Department of Energy. Illinois is the second state to adopt the code and will begin building under it in June.

So what does the new Energy Star and energy efficiency translate to? An increase in energy efficiency of windows, more insulation required, more air sealing of homes and ducts, insulation of hot water lines, more documentation related to HVAC systems and more efficiency in fixed lighting.

Homes will also have to pass a test that checks for pressure and leaks. More third party inspections will be required to verify that the codes are being met.

While programs like LEED are voluntary, Coveny says the Energy Star 3.0 code is required.

There are benefits beyond energy efficiency, Coveny says. The changes in the code are forcing builders to use more of a team approach where everyone involved from architects to HVAC experts are part of the pre-building process.

“These are things that will make a better product,” Coveny says. “The process of building a home has changed dramatically. Everybody has to be on the same page. Everybody has a seat at the table.”

Hall agrees. Although John Hall Custom Homes Inc. not only meets, but exceeds the Energy Star code, Hall says it helps keep other builders from cutting corners and forces them to build a better home.

“It is one of the most responsible codes we have in place,” he says.

While clients come in with more knowledge of green products and energy efficiency they are often surprised by what is already in place.

“A lot of it is the bricks and sticks and behind the scenes of the house,” Hall explains.

Cost of green

As the term “green” home came into the mainstream the cost to build one always seemed extremely high.

But, Hall says, as the technology advances and the products become more widely used the prices have come down.

“We use as many recycled products as possible,” Hall says of building homes.

For example, the base moldings are made of recycled materials and they use cabinets and paints that are VOC free. He says cabinets with water-based finishes are now standard in the industry.

“We are taking things that are cost effective and green and putting them together,” he says.

Other products have come down in price as well.

Hall says he can put a bamboo floor in for the same price as oak. Bamboo can grow much quicker so is considered a renewable resource.

Improved pricing makes green more attainable.

“Consumers don’t want to pay for green,” Coveny says. But ultimately they would like energy efficiency to mean they are paying less in utilities.

Hall says they do a special test of the home before it is even built by creating a computer model. He says you can alter things like adding more insulation and the program will calculate what the cost savings would be.

“We can identify what the return on investment is going to be,” Hall explains.

There are still circumstances where it may not be cost effective to include big-ticket green items.

In cases such as geothermal systems, wind or solar power clients have to consider the cost over the time they will likely be in the home and in some cases still would not see a return on the investment.

Hall says they are always prepared to help a client go to the next level of green — whether they are interested in pursuing LEED certification or want to research a product they saw used on TV.

Green Homes

3/23/12

Home prices and interest rates are at record lows, but sometimes that’s not enough to get a buyer into the house of their dreams. With the credit crunch still grinding along, builders are greasing the wheels by helping buyers with financing.

Many are taking an a la carte approach. For example, M/I Homes offers multiple ways to make the deal fit the buyer. “Each customer and subdivision is viewed individually,” says Ron Martin, area president. “We have a certain amount of dollars set aside to provide options or upgrades, buy down the interest rate, pay closing costs, etc. It’s a flex type program.”

J. Lawrence Homes also may offer assistance by paying a fee to lower the points a borrower must pay on the loan, or by covering the closing costs, or providing free upgrades on the home itself. “We can make sure the home comes in within their budget, and we can mold the transaction to their needs by working with our preferred lender,” says John Wozniak, company president.

Upfront incentive

One popular incentive buyers may encounter today is the “buydown.” This is where the seller (builder) pays an upfront fee to “buy down” the interest rate for the first few years of a 30-year fixed rate mortgage, temporarily lowering the mortgage payments. When the low payments last for one year, it is called a 1-0 buydown. Two years of lowered payments is called a 2-1 buydown.

With a 2-1 buydown, the homeowner might pay 1.875 percent interest the first year, 2.875 percent the second year, and then pay their regular rate of 3.875 for the remaining years of the mortgage, explains Art Lavalle, branch manager at Platinum Home Mortgage Corp. in Rolling Meadows. “They can ease into their payments and still get the advantage of a fixed rate,” he says. “It’s safer than the old adjustable rate mortgages because the buyer must qualify at the higher rate, not the lower rate the way it used to be.”

Many builders will pay closing costs for the buyer. This saves thousands of dollars outright. Depending on where one lives, closing costs can amount to 1-2 percent of the loan amount, says Dan Gjeldum, senior vice president at Guaranteed Rate in Chicago.

If the buyer is getting an FHA mortgage, there is the opportunity to purchase job loss insurance. “If they lose their job in the first 24 months, it can pay their mortgage for six months,” Lavalle explains. The builder or developer might pay the cost of this insurance as well.

Working relationship

Builders have always worked with so-called “preferred lenders.” These are mortgage lenders that are affiliated with the builder’s parent company, or a separate company with which the builder works closely. For example, housing giant Pulte has three brands of homes: Del Webb, Pulte Homes and Centex. “They are affiliated with Pulte Mortgage, so it’s a one-stop shop,” says Maria Wilhelm, general sales manager at PulteGroup in the Chicago area.

Buyers are not obligated to use a builder’s preferred lender, but many choose to out of convenience. “People don’t want to shop 10 different mortgage lenders,” Wilhelm says. “But we can show them the comparison rates if they ask.”

There is nothing wrong with comparison shopping for home financing. Not all lenders are alike. But there are advantages, builders say, in choosing their preferred lender.

“It’s a seamless process,” Wilhelm says. “It syncs the financial process with the timeframe of the home building process. They can come in and get pre-approved, then look at the correct product. Our mortgage adviser works with them in person throughout the process.”

How it works

Mike and Judy Marino recently bought from Pulte in the Grand Dominion active adult community in Mundelein. The Marinos hadn’t applied for a mortgage in more than 35 years, and they knew things had changed.

“We went through the process of getting pre-approved. It was a little daunting with all the paperwork nowadays,” Mike Marino says. “But we did conference calls, and they walked us through everything. There was lots of information to provide.”

Luckily, the Marinos sold their former home just in time to pay cash for their new home, so they didn’t need the mortgage after all. But they say they were pleased with the way Pulte pulled things together and guided them through the mortgage process.

“Over 90 percent of our clients who finance say this was a great value,” Wilhelm says.

Dan Gjeldum, senior vice president at Guaranteed Rate, a mortgage lender in Chicago, offers the following mortgage tips.

How can a buyer make their mortgage process easier?

“I have been preaching the “pre-approval” process for years and it really has never been more important. A pre-approval will determine the amount of money a buyer can finance, but most importantly can address any and all items that will be needed during the mortgage process. Also, I have clients who would not have won the bidding on their home without that pre-approval letter making the difference. “

How can a buyer make their mortgage cheaper?

“That is all about credit scoring. (Lenders charge more to those with lower scores, as they represent a greater risk in the lending world.) Identifying the credit score early in the process is best. If there is anything surprising on a report, getting out in front of it and making the repairs needed to improve the score is paramount.

What do consumers need to know going into the mortgage process?

“There is continued attention to detail on the underwriting side. Five years ago, we didn’t ask for anything. In 2012, we ask for everything. Post-closing, the happiest buyers have been the ones who knew the pains they could expect going into the process thanks to their agent’s and lender’s advice and knowledge.”

There was a time when square footage was king and while people still like to have space in their homes builders are seeing a shift in what buyers are seeking.

Homebuilders say difficult economic times have changed the way buyers are looking at new homes.

Court Airhart, president of Airhart Construction, says the trend lately is more of a philosophy rather than a specific desire.

“People are taking a much more conscientious look at what they need,” he says. “Things had always been bigger is better, more is better. But now, people are looking at what they need and what they are going to use.”

Brian Brunhofer, president of Meritus Homes, says people are looking at their home building purchase differently. They’re looking at the bigger picture and long term investment. Homebuyers are also looking at the total cost — not just of the home, but assessment fees, maintenance and taxes, he adds.

From first time homebuyers to empty nesters those in the market to buy a home are looking at how the house will fit their needs now and well into the future.

Fit, flexibility

In addition to matching a home to one’s needs, people also are interested in more flexibility in their home’s layout, Airhart says. They are looking for a room that could be used three or four ways over a span of years.

“It’s more of a vision of how we are living,” he says.

Airhart says as an example, a couple he is working with — soon-to-be empty nesters building at College Station in Wheaton — wants to change the eating and dining area to be a more efficient space for their needs and would rather have the space for family get togethers.

“Formality is going away. It isn’t as important. But, people still want a larger space where they can get a lot of people in,” he says.

Brunhofer agrees flexibility is highly desired. He has buyers who want to be able to convert a home’s plan with a first floor den and powder room into a first floor bedroom and bathroom if needed for returning children or aging parents.

Still some specifics

No matter the budget — big or small — people want to spend wisely. Brunhofer says for those looking to build a $500,000 to $600,000 semi-custom home they still have specific items in mind.

“They are spending a lot of time focused on how they’re spending their dollars. They want something that makes sense to them,” Brunhofer says.

People are still adding wine coolers and ice makers in areas accessible to not only the kitchen, but also the entertainment area or adding a refrigerated drawer just for juice boxes for the kids.

“The convenience factor is central over comfort,” Brunhofer says.

Buyers are starting to opt for their laundry on the second floor where it is most convenient and using the space in their mudroom for storage of large quantity items purchased at club warehouses.

Airhart says families are also opting for lower maintenance homes. He says people don’t necessarily want to be tied to their yard on weekends, mowing or shoveling snow. They’d rather be at their child’s game or participating in their favorite activities.

While people still like the idea of a master bath, Airhart says the large tub isn’t as popular as it once was. He says more people are requesting a better, more elaborate shower.

The desire for closet space has not waned and walk-in closets remain in demand.

Also unchanged is the focus on kitchens. They remain a central theme for homebuyers serving as the heart of the home.

Airhart says an open kitchen with an island remains a popular and sought after feature.

More choices, more options

There was a time, Airhart says, when builders offered three choices of homes and a handful of paint colors and people could choose from those options. But now, he says, there are more opportunities to make the space your own.

“The trend is people want what they want and have the ability to make that decision,” Airhart says.

Airhart says he is building a home for a family he worked with previously on another home. A few years ago they would likely have wanted a larger home with more square footage, but now are downsizing.

“They don’t need it and they don’t want to pay to heat and cool it,” Airhart says.

Expectations have also changed, Brunhofer says. People expect new homes to have granite counters in the kitchen and decorative tile or wood on the floors. Things that used to be an upgrade are now expected in a new build, he says.

“The beauty of this business is they can tailor it to what they want,” Brunhofer adds.

A good relationship and exchange of ideas between the buyer and the builder is key to getting what you want, Airhart says.

“If you’re a homebuyer and you want a really great experience, team with your builder,” he suggests. “It becomes this great inventive experience.”

Brunhofer says today buyers are well informed and love to learn about what others are doing in their homes and what the possibilities are. He says people are more likely to come to the table with ideas and even pictures and paint colors.

“For us it’s great because we better understand what they are looking for and can identify how much it would cost,” Brunhofer says.

Technology helps homes run well

There was a time when opening a garage door at the push of a button was revolutionary.

Now you would be hard pressed to find a home without one and may know people who use an app on their smart phone to open the door or remotely check to see if they remembered to close it.

With technology so integrated into daily life it is becoming a component of how new homes are designed.

Lennar, a homebuilder with communities in Bridgeview, Joliet, Chicago Ridge and Morton Grove, has recently begun including the Nexia Home Intelligence system standard in all its homes as part of the Everything’s Included incentive program, says Doug Bober, division president of Lennar.

The system includes keyless entry, thermostat control, the ability to turn lights on and off and a wireless camera all controlled by a smart phone, computer or tablet. The components can be controlled from a device even when the homeowner is at work or the store.

The decision to make the systems standard in new Lennar homes is driven by a desire to make everyday living more convenient.

“In today’s technological world just about everyone has a smart phone and is looking for ways to make their lives easier,” Bober says. “Lennar is on the cutting edge of technology, yet another reason to purchase a new home versus resale.”

Home of the future is here

Mike Creeden, president of Digital Innovations, Inc. in Spring Grove, is a member of the board of directors of Custom Electronic Design & Installation Association (CEDIA). He says residential technology has been around for about 20 years so it’s considered “new” to the home building industry. He says one example is that the industry hasn’t unified on terminology. Some call it home automation, others refer to it as electronics systems contracting. Creeden says he likes residential technology.

Regardless of what it is called, homes are an evolving technology frontier. The addition of the Nexia systems in Lennar homes is catching the attention of homebuyers.

“The response has been very positive and we have definitely seen an increase in traffic and sales since we began offering this system,” Bober says.

Creeden says the No. 1 reason people come to his company is because they want a flat panel TV mounted on the wall and don’t want any of the wires or components such as a cable box or Blu-ray player visible.

While it may seem like a simple request, Creeden says it involves the proper placement of electrical as well as cables and an easily accessible place to store the equipment out of sight yet able to be controlled remotely.

In a new home Creeden says it is critical for those planning residential technology to be able to communicate with electricians, architects and interior designers to make sure all the components make sense for everyday living.

“This is what is happening everywhere,” he says. “It’s not going to slow down, this affinity for technology.”

Trying it out

Many homeowners may already be dabbling in home technology, Creeden says. While it may be fun for awhile, a dozen apps for turning things on and off, opening doors and operating systems can get cumbersome. This is where home automation comes in — streamlining all the home technology.

“Most people think technology first and intuitive and efficient later,” Creeden says, adding that it is his job to think of the most efficient components and usage.

Creeden says people are moving toward consolidated interfaces like controlling the lights, room temperature, music or television to be set to where they want it when they come home from work all at the touch of a button.

Homeowner Bill McAllister of Fox Lake had Digital Innovations streamline his home entertainment systems and provide audio throughout his house.

“The biggest thing it did for me was consolidate audio and video all into one remote system,” he says.

McAllister says they were able to get rid of the stack of remotes as well as eliminating a satellite box in every room with a television. His wife, a hockey fan, used to watch the games on a small screen when he wasn’t home because she wasn’t able to make heads or tails of all the devices. With the new system she is able to easily work it and enjoy the games or movies in their theater room.

The system dims the lights when they are watching a movie and controls an exterior light when letting the dog out at night.

For McAllister an expansion down the road may include creating a movie server to store all of his movies or controlling the thermostat and door locks.

“Some day you could probably check the chlorine level in the swimming pool,” he says. “It’s pretty exciting stuff. It’s amazing how fast it has advanced in the last five years. It’s hard to imagine what it will be like in 10 years.”

Creeden envisions voice recognition improvements advancing home technology so a person could walk in and say “I’m home” and voice automation would turn on lights and other systems.

“Imagine, the Jetson’s home of the future is already here,” he says.

Mainstream for the masses

Not that long ago residential technology was seen as an extra or a luxury for the wealthy, says Creeden, but as technology becomes more affordable and sought after, these systems will become more mainstream.

“The question is when will it go to the masses?” Creeden says. “We are seeing a lot of that movement.”

When building new homes, more and more homebuyers as well as builders are considering residential technology as a component, especially for custom homes. Creeden says as an industry they are trying to create more awareness and CEDIA offers courses to professionals, such as architects, to educate others on the possibilities as well as the process.

The challenge, Creeden says, is people want seemless and integrated technology and believe they can get it with a $59 wireless router. There is a process involved and like other industries, cost will depend on the scope of work, Creeden says. One of the keys is the design element on the front end. He says part of that is making people aware of what’s possible and retaining a company to take them on that journey.

Lennar is on the forefront of making residential technology accessible to its homebuyers staying one step ahead of the latest conveniences to simplify everyday living.

“Lennar is continually researching new technology to incorporate into the home. The opportunities are endless,” Bober says.

There has been a lot of uncertainty and change in the real estate market in the last few years. But, one thing those in the know agree on: The housing market seems to be heading in a positive direction.

While that’s good news for the economy it’s also good news for anyone considering the purchase of a new home.

Someone who buys a new home now is in the perfect position, explains Andy Konovodoff, president of K. Hovnanian Homes. Four years ago buyers were at the height of the market and paying a high price for homes. In three to four more years the market will likely be back to higher prices and rates.

“This is the perfect time, right in the middle,” he says.

Mortgage rates are the best they have been in 50 or 60 years, Konovodoff adds.

“My dad had a mortgage in the late 1940s that was 4 percent. I thought I would never see that,” he says.

As a result of the economy, home prices have gone down while everything else has appreciated and interest rates remain low.

“It’s the perfect storm right now,” he says.

Factor in reality

Home prices are still low, but will likely begin to increase as the economy mends.

David Patzelt, president of ShoDeen Inc., says improvements in the industry, such as an increase in home sales, are being seen in markets like Florida that were first hit by the collapse.

“The market appears to have hit bottom and is returning,” he says.

Patzelt says other factors that will impact new home prices include the rental market, which is becoming saturated and driving rental rates higher.

“This will start to push renters back to buyers,” Patzelt says.

Nathan Amidon, division manager of New Home Star, a real estate sales and marketing firm, agrees pricing has come down to a point where owning is more attractive.

“We have seen home sales pick up in recent months, suggesting more people are gravitating back to owning,” he says.

For those who already own a home Konovodoff says a new home could be considered an equity swap. While the home being sold may have decreased in value by 30 percent, so too have prices on new construction.

“It’s a lateral move,” Konovodoff says in terms of the cost, but points out that in return homebuyers are getting new communities, amenities and a place they want to live.

Amidon says new homes are a value right now because the difference in pricing between a newly built home and a resale is not that great and buyers get a lot of benefits from a new home designed to their taste.

Used homes come with their share of costs such as replacing and fixing dated materials and appliances, he says. “New homes don’t have the same risks because all the features are new and come with builder and manufacturer warranties protecting the home owner from these out-of-pocket expenses.”

Commodity or material prices also affect new home prices, says Patzelt.

When housing slowed down many lumber mills closed, Patzelt says.

“Thus, inventories have been greatly reduced. Low inventories on the ground and mill closings has the supply low and thus prices are heading up. When the commodity prices go up, builders will need to start raising prices,” he says.

As the economic downturn hit, there was an oversupply of homes as demand dwindled, explains Amidon. “With demand beginning to increase, as evidenced by the Illinois Association of Realtors statistics showing increased home sales year over year, the opposite will be true,” he says. “Permits in Illinois have dropped by 90 percent meaning there have been very few new homes built over the past few years. Increased demand and very little new home supply will lead to rising prices in the future.”

What’s out there?

Konovodoff says with fewer builders in the marketplace and an improving economy, demand for new homes will also drive up home prices.

Some builders saw a profit late last year and others closed the gap on their losses, he says.

“We’re at the tipping point now,” Konovodoff says.

In an effort to keep buyers interested many builders have been offering discounts, free options and credits.

“This is great for buyers because they are able to really minimize the out of pocket cash to purchase and are able to afford better features to truly make it their dream home,” says Amidon. “I see this as the first thing that builders begin to scale down as costs of these options often can rise faster than those items they include in the base home. These deals are still out there right now and buyers should take advantage of them.”

What hasn’t changed during the economic struggles is many homebuilders’ commitment to quality.

Patzelt says during the slowdown ShoDeen took the time to review its product line.

“We analyzed what worked in the past, asked ourselves if it will still work in this new economy, and more specifically do we have what we believe the ‘new home buyer’ is looking for,” explains Patzelt. “As a result we made improvements that include more energy efficient specifications, green building techniques and improved floor plans for the way people want to live today.”

More coming

Another sign that the housing market is improving is the continued progress of builders with longevity in the market.

ShoDeen is building on its success with a new community, Elburn Station. It will incorporate many of the building and environmentally friendly designs as ShoDeen’s Mill Creek in Geneva, a master planned community of single and multifamily homes that has been built in stages and won awards for its building standards and environmental features since the late 1990s.

Konovodoff says in 2011 K. Hovnanian doubled its communities by acquiring properties and expects to acquire five more this year.

“Things are pretty active,” he says. “It’s exciting.”

The facts are in: There were 2,343 new housing starts in the nine-county Chicago area in 2011, just a tick down from the 2,367 in 2010, according to the research firm Metrostudy. That may seem minuscule compared with the whopping 30,000 annual starts in the boom years. But the good news is a slight uptick is expected in 2012, with approximately 2,500 starts this year, predicts Chris Huecksteadt of Metrostudy. (Figures include single-family homes, townhomes and duplexes, but not condos.)

Another positive sign, Huecksteadt says, is that closings are outpacing starts, which means more already-built new homes that were just sitting empty are being sold. “We’re absorbing inventory,” he says. “That is a good thing.”

Further, the number of vacant developed lots (i.e. empty subdivision lots) dropped to 47,086 in 2011 from 48,726. Granted, that’s still a lot of lots left, but the number will continue to drop, predicts John Wozniak, president of the Home Builders Association of Greater Chicago. “These lots will change hands and will come back on the market over the next few years,” he says.

People popping up

Some builders report buyers are already coming out of hiding. Maybe they have gotten used to stricter lending standards, and have saved up for their down payments. Perhaps they have come to terms with the price they must accept for their current house. Maybe they simply looked around and realized there are a lot of good deals out there right now, as builders hold down prices and quality tradespeople compete for business.

“In January, we had more than twice the usual foot traffic at Misty Ridge in Romeoville,” says Ed Kubiak, of Beechen & Dill Homes. “I hope it’s a good sign of what’s to come this year.”

Savvy builders like Beechen & Dill — which was the Home Builders Association of Illinois’ Builder of the Year in 2011 — have spent the past several years retooling their thinking and their products.

“Being in touch with buyers is making a difference,” says Kubiak, who worked in sales last year. “Square footage is lower, and people are more into paint colors and granite, less into fireplaces and big tubs. They want a nice shower,” he says. “Generation Y (into which many first-time homebuyers fall) is a different buyer than we saw the past 10 years.”

Even move-up buyers are scaling back. “In the larger homes, we are doing only one fireplace as opposed to a few years ago when we might have done three or four,” Kubiak says.

“2011 was better for us than the previous two years, and we hope to close 50 homes this year,” he says, which is double 2011’s tally. “I think there is some light at the end of the tunnel.”

Launching new

The national builder M/I Homes has been the No. 1 townhome builder in the Chicago area market, according to Tracy Cross & Associates, a consulting group serving the residential real estate market.

M/I Homes is launching two new communities by the end of February. Sheffield Square in Orland Park has 186 rear-loading (garage in the back) townhomes priced from the upper $190,000s. Front-loading models with full basements start at $250,000. Savannah Crossing in Aurora has townhomes starting in the $150,000s.

They appeal to first-time homebuyers, downsizers, and divorcees who want to be close to transportation, without the headaches of home maintenance, says M/I Homes Area President Ron Martin.

The formula has fueled the company to anticipate 25 percent more home sales than last year, he says.

“We’re one of the few builders who are optimistic about the outlook here in Chicago,” says Martin.

Mammoth homebuilder Pulte continues to launch new communities. It is introducing a new project at The Glen in Glenview called The Regency at The Glen. “It is similar to Arlington Crossing, which sold out on Super Bowl weekend, so we are extremely confident it will be successful in The Glen,” says Maria Wilhelm, general sales manager at PulteGroup. The community will have 149 homes, 40 of which are ranch villas, and 109 townhomes.

The second new community will be Savoy Club in Burr Ridge. There are 45 home sites there starting in the $600,000s. “They are large ranch plans, targeted toward the empty nester group,” Wilhelm says. The company also recently debuted Gateway Estates in Park Ridge, an attached townhome community starting in the high $300,000s.

Wilhelm is confident about 2012 for Pulte. “I think we will see an uptick. Our land positions set us apart from our competition,” she says.

John Hall Jr. of John Hall Homes says things looked like they were picking up last year at his company, a small custom homebuilder. He hopes it continues despite the political and economic uncertainty that comes with an election year.

John Hall Homes is working on six homes in St. Charles and Elmhurst, in the $500,000-$1 million range. “The clients who are buying and building have realized the truth of the market: that even though the home they’re selling is down in price, so is the new lot and home they’re buying,” he says. “The move percentage-wise is the same.”

Truly move-in ready

The time is right to buy new construction home.

Whether you’re a move-up buyer, downsizing buyer, or a renter buying for the first time, understand this about today’s home buying environment: There may never have been a better moment in history than now to buy a new home.

Factors include the ability to land the most modern features, gain the most environmentally friendly and efficient operational features and enjoy the comfort of knowing big-ticket items from roof to furnace won’t soon need to be replaced, says Diana Ivas, broker associate with RE/MAX Elite in Hinsdale.

Among the biggest aesthetic benefits of new homes are higher ceilings, Ivas says. Most have 9- or 10-foot ceilings and many others boast cathedral or vaulted ceilings. “They give you much more of a feeling of opulence, and in many cases the windows are taller as a result of the higher ceilings,” she says. “That provides more natural light, one of the first things people look for.”

Finishes are also likely to be more up to date. For instance, the oak floors of old have given way to Brazilian cherry and walnut floors. Highly-sought wide plank and hand-scraped floors are also more likely to be found in new homes. Glossy white ceramic tile was big in the 1990s, but today dates a home. New homes often feature natural stone, tumbled marble and terra cotta, Ivas says.

“And here’s a biggie,” she adds. “A resale house from the 1980s might have brass fixtures, but today people prefer brushed nickel or oil-rubbed bronze.”

Newer homes also tend to make better use of space, and nowhere is that more evident than in today’s more livable basements, stresses Doug Reynolds, president of Northfield’s Reynolds Architecture, which in addition to being an architectural firm is also a home builder. The basements of new homes, like the upper levels, are often invested with higher 9- or 10-foot ceilings, and they tend to feature larger windows and more expansive concrete window sills, he says.

These features help ensure the once dark and dingy lower level now can be turned into a home theater, gym and in some cases indoor driving ranges.

Outside, new houses are using more stone than brick on the exteriors, and many are serving up “a more East Coast, even Nantucket feel,” Ivas says.

“So you’re not only getting the interior features, but you’re also getting the very latest look and style in new homes” on the outside, she says.

New mechanicals

Of even more importance to many buyers in these stressful economic times is the knowledge that in purchasing a new home, they are also garnering greater operational efficiencies and corresponding cost savings. “If you’re buying an older home, you’re buying obsolete technology,” says Dave Faganel, sales manager of Batavia-based Faganel Builders LLC, a semi-custom builder in suburban Chicago. “It will cost you more to operate, and cost you more on utilities, which are only going to go up in price . . . The newer houses just perform so much better. We’re creating a differential between new and older houses.”

In addition to performing better, new homes also offer peace of mind that comes with knowing replacement costs can be deferred for a decade or more. For instance, homes currently being built by Faganel Builders come with 10-year warranties on furnaces, air conditioning and windows. It doesn’t make sense to buy new if you‘re planning on living in a home two or three years, Faganel says, quickly adding, “But if you’re going to be in a home for years and years, it does.

“It just becomes a better value from the standpoint of energy usage, and not having to change out such things as appliances and furnaces.”

Dick Greenwood, Northbrook-based director of builder marketing for Coldwell Banker Residential Brokerage, is another expert who cites operational and energy efficiencies as top reasons to buy new. “In the last two or three years, the building industry has revamped everything,” he says. “For instance, all the insulation manufacturers have come out with new insulation.

“Now foam is sprayed between joists and wall studs, and creates a much more energy efficient home than you could get with old fiberglass batt insulation.”

New home buyers also have to worry less about such issues as water damage in their basements, according to Reynolds. “Sump pumps, the bane of everyone’s existence, are less likely to fail,” he says.

“And you’re likely to have a better drainage system in a new home. When we build a home, we’ll have both interior drain tile under the home, and exterior drain tile outside the home. Some older homes don’t have drain tile at all. We’ll also put in multiple sump pits so if there’s an obstruction, the water has multiple ways of flow away from the home. Generally speaking, new homes have more money invested in protecting the home from a dewatering point of view.”

Whether moving up or downsizing into a new home, you can’t expect that abode to be perfect forever, Ivas says. But new homes are nonetheless good values. “They’re exciting to move into,” she adds. “You’ll be the first person to decorate it. You’ll be the first person to make that house a home.”

Getting them in the door – Special incentives help make owning a new home a reality.

If you’ve ever driven past a model home and wished you were pulling into its driveway or enjoyed looking at the stylish interiors of a newly built home and imagined yourself entertaining guests there, it may be time to indulge the fantasy. Prospective homebuyers may be surprised to find there are many ways to help make that new home a reality.

Call it a sign of the times or even, in some cases, clever marketing, but incentives all boil down to savings and extras.

To get buyers over that hurdle from dream to reality many homebuilders and developers offer a variety of incentives. The promotions are enough to get people’s attention and get them in the door to see all the development has to offer. And often, it’s the little nudge they need to get them into their own home.

Roger Gerstad, president of Gerstad Builders, says incentives can help make an inquirer into a buyer.

“We have seen incentives are definitely the only thing that attracts potential buyers in this market,” Gerstad says.

Sweeten the pot

In a real estate climate that can be favorable to the buyer with a large market of choices, homebuilders are sweetening the deal to make a new, move-in ready home the best choice. On top of being able to choose from layouts, appliances, finishes and paint colors to make the new home fit a buyer’s taste without the hassle of removing wallpaper, replacing appliances and budgeting for a new roof, homebuilders are helping to make new homes more affordable.

Gerstad says they offer a number of incentives and they vary at each of its four locations including Richmond, Poplar Grove, McHenry and Williams Bay, Wis. Each of Gerstad’s communities offers a variety of options ranging from two to five bedroom homes.

Gerstad says some of their offers include 10 percent off the base price, building out in phases, and upgrades to select lots. Additional cash incentives and upgrades worth up to $7,000 also are available, he says.

So how do you get in on these deals? It’s as simple as starting the conversation.

At Gerstad Builders a sales staff is available on-site at each location and will sit down and discuss the options with potential buyers including modifying all plans to meet a buyers needs.

“Our specialty is to make dreams come true,” Gerstad says.

Gerstad has made upgrades such as wider hallways, larger doors and more floor space in bathrooms a more standard feature to help buyers age in place with more accessible homes.

New England Homes, developer of Acadia on the Green condominiums in downtown Downers Grove, is offering $40,000 in incentives, which can include $10,000 in upgrades, half price on an additional parking space and assessments paid for a year. The luxury condominiums include one to three bedrooms and up to 2 ½ baths in a mixed-use building in the heart of the vibrant downtown.

Weiss Development, which built River’s Edge condominiums in Vernon Hills, will pay up to $20,000 in mortgage, taxes and assessments.

Seeing is believing

Do the incentives sound too good to be true? Homebuilders say there is more flexibility in today’s market and they are working with homebuyers to make the new home a reality.

Scott Stern, president of TriGen Builders of Homewood, has been building homes for 26 years, following in his father’s footsteps. Stern is helping make homeownership affordable by offering FHA loans and allowing buyers to put in the “sweat equity” to earn a portion of their down payment.

Stern’s latest development, Markham Meadows, is offering homes at $190,000. Stern says if the buyer is willing to purchase their own materials and paint and stain the interior of the home they can put down a $2,000 down payment and earn the additional $4,600 toward the three bedroom, two bath home.

“It’s really a throwback when you think about it,” Stern says of new homeowners helping build something from the ground up.

About 99 percent of Stern’s homes are sold to first time buyers who have credit and income, but no cash, he says.

Stern says they provide guidance and a booklet spelling out details such as how much paint to purchase. Nobody paints until they are lender approved and friends and family can help. Sterns says homebuyers have had painting parties to show off their new home and get an extra hand.

“When you look at it, it gives you a warm and fuzzy feeling,” Stern says adding that he believes buyers are drawn in by the incentive and wonder how it is possible.

“There’s a lot of paperwork and patience with the clients, but it allows someone to purchase who wouldn’t otherwise be able to own a home,” he says.

Stern says he believes the sweat equity also is a catalyst for people to work hard to stay in their homes because of an additional sense of pride in ownership.

Lending draw

At 565 West Quincy a 241-unit condominium development in the West Loop there are plenty of draws from FHA financing that can offer as little as 3.5 percent down to the Q Room, an amenity featuring two bowling lanes, a movie screening room, a putting green, pool and foosball tables, a bar area, and a fully equipped fitness center with cardio equipment and weights.

In addition to all that, anyone who purchases one of the five remaining units at 565 Quincy by Oct. 31 will receive a $5,000 gift card toward furniture at West Elm, a 10 percent discount on the furniture purchase as well as free design services.

The condominiums range from 700 to 1,058 square feet with one bedroom to one bedroom plus den options with a parking space. Prices for the condominiums range from $194,900 to $289,900.

Dean Radcliffe moved into 565 West Quincy in August after being introduced to the residences by a friend and found the furniture incentive appealing.

“I had chosen to move very lightly, with only my bicycle, musical instruments, clothes and an air mattress,” Radcliffe says. He used the gift card for a sectional sofa, bookcase and rug and has plans to purchase a few more things.

“The credit was generous enough to extend the purchasing over several visits,” he says. The staff at West Elm also was helpful making choices and making the shopping experience fun, Radcliffe says.

Dishing out the eye candy.

Model home designers set the stage for real life

Model homes are about dreams and aspirations. A successful model home should resemble a movie set, not a sales center, designers say.

“Model homes have come a long way in 10-20 years. They’re much more cozy, lived in, complete,” says Helen Velas of Eleni Interiors in Naperville, who has been a model merchandiser since 1987.

“There is a difference between a decorator and a model merchandiser,” Velas explains. “Our goal is to make it look like a family actually lives there.”

That includes setting the table, setting out games, and adding aromas to the kitchen. Children’s rooms feature strong themes that highlight “value activities” such as Scouts, horseback riding or sports. The man’s study has golf trophies, and photos of classic cars.

Velas calls these “memory points,” which are scattered throughout the home to make a lasting impression on potential buyers. They might include things like a custom stone range surround, or a Cinderella-themed girl’s bedroom.

A home that is not professionally merchandised feels like a hotel,” Velas says.  “It feels a little bit vacant, and you don’t aspire to it; you don’t picture your family hanging out around the fireplace.”

Working like social scientists, model merchandisers design with specific demographic profiles in mind.

“We find out from the builder or developer who they are targeting,” Velas says. “Usually they will have extensive research on age range, income level, children’s ages, why they are moving, where they’re coming from, and where they work. That helps us to shape the lifestyle we want to show.”

Aspire

Mary Cook & Associates is also a major player in Chicagoland model home design. The firm has done seven area communities in the last 24 months, from rental apartments in Lakeshore East’s Aqua to Mayfair in Naperville to the Trump Tower.

Kate Brennan, business development manager at the firm, says the Trump models required five distinct profiles. “One was a 36-year-old single woman who is a marketing executive and lives in the city and loves to travel. Her color palette is black and white, with pops of persimmon,” Brennan says.

Model merchandisers say the thing most homebuyers respond to is the concept of moving up. They call it “aspirational.”

Mayfair, a townhome community in downtown Naperville, was set to debut new models at the beginning of October designed by Mary Cook & Associates. Even the developer’s logo on the website reads: “M/I Homes Move Up.”

“The townhomes start around $200,000, but the detail is pretty remarkable because we’re including finishes you would see in more expensive homes,” Brennan says. These buyers still want to see things like granite countertops and kitchen islands that have wine storage or that look like furniture, built-in spice drawers, tile details in the master baths.

As for décor, “In these townhomes that are close to transportation, we use urban influences pollinating suburban settings because buyers want the conveniences of the city in the suburbs,” Brennan says.

Eye candy

A model should be a bit like a show house too. That’s where the wow factor comes in.

“We show the finishes they don’t have now that they’re dying to have,” Velas says. Hot items include:  decorative windows with beveled glass, iron detailing on the front door, wine storage in the kitchen, steam ovens and microwaves, cultured stone/composite stone on arched doorways and stove surrounds, glass tile, vanities that mimic furniture, sinks in non-porcelain materials, kitchen cabinets to the ceiling, textured and metallic paint, hand-scraped, wide plank flooring. Velas is planning many of these for The Hamptons of Hinsdale, whose model is opening at the end of the year.

“You have to give the prospective homebuyer as much eye candy as possible,” says designer Scott Arthur Yerkey of Scott Arthur Yerkey Design in Chicago. He has done three single-family homes at Meadow Ridge in Northbrook recently. Yerkey customized the very structure of the model homes, raising doorway heights, opening up a cathedral ceiling, adding larger baseboards and crown molding, putting marble details in all the bathrooms, and using double-thick granite in the kitchen.”

Designed to sell

Does all this window dressing help sell homes? Yerkey, for one, keeps designing models at Meadow Ridge because the homes themselves are selling — even though a model home may cost a third more than a basic home in the same community.

Brennan says Mary Cook & Associates experienced the same success at Aqua. “The rental units had been open for 18 months, and were moving kind of slowly. We took a vanilla box and created a dynamic rental unit. The first person they showed it to rented, and over the next two weeks they had 11 more rents, so it’s a very powerful tool,” she says.

What happens to all that great stuff inside a model home once it’s purchased? Sometimes buyers buy the whole thing furnished, or the merchandise is moved to another model or sold at an auction — just like on a movie set. Either way, designers say it’s money well spent.

“The success is just as strong at $199,000 as it is at $1.6 million,” says Brennan. “The fundamentals are still the same.”

Model home designers say buyers expect to see the latest in home features, finishes and décor when they visit a model. “These are things that their friends who bought their houses five years ago don’t have,” says Helen Velas of Eleni Interiors in Naperville. “It gives them a reason to move.”

Here are some features that fuel the fantasy:

• Custom woodwork, from ceiling beams to built-ins, to crown molding to wide plank flooring

• Furniture that is just a cut above what the buyer can afford

• Huge kitchen islands with seating and built-in appliances, such as warming drawers and half-drawer dishwashers

• Wine storage in the kitchen

• Custom stonework inside the home on archways, range surrounds, bars

• Architectural range surrounds, or custom range hoods

• Kitchen cabinets that go up to the ceiling

• Steam washers and dryers

• Textured wall treatments

• Textured or metallic paint

• Decorative vanity sinks in alternative materials, like wood, metal, stone, or glass

• Glass tile accents in the kitchen and bath

• Vessel sinks (those that sit on top of a vanity like a bowl)

• Custom front doors with ironwork

• Decorative windows with beveled glass

• Integrated refrigerators that match the cabinetry

New homes can be altered to reflect individual style

There’s good news for anyone who believes cookie cutters should be reserved for cookies, not homes. The opportunity to start with a standard home design and alter it to make it distinctively your own is not a pipe dream. In fact, it’s all part of the plan.

In today’s market, offering buyers flexibility and giving them a range of prices within any given floor plan is a marketing necessity for production builders, says Gail Payonk, sales and marketing director for Wheaton’s Next Generation Development, a privately-owned builder and developer in Chicago’s collar counties. “The days of a builder having 25 off-the-shelf plans and prices are fairly diminished,” she says. “There’s not enough demand, and there’s a significant cost overhead associated with carrying all those plans in the system.”

Observing the same trend is Jeff Harting, president of Northbrook’s FGH Architects, a custom-home architectural firm. “We’re encouraging production builders to be more open to slight floor plan modifications, not just variations in finishes, upgrades and materials,” he says. “Five years ago, a builder would put out a floor plan and say take it or leave it.

“Now, they’re more willing to work with homeowners to customize the home, and make it their own in floor plans and room modifications, rather than in finishes and materials.”

Build out options

Today, most floor plans have available build-out options, Payonk says. In a standard three-bedroom-and-loft plan, for instance, a builder may offer an alternate second floor plan providing two more bedrooms and a Jack-and-Jill bath option. In a floor plan with a standard kitchen with an ordinary island and free-standing appliances, an option might be a gourmet island with an unusual curvature and a veggie sink, and built-in appliances.

In these cases, the production builder is offering alternate floor plans that are standard within its system, Payonk says. “Even though it’s a change, it’s been priced out, engineered, and is probably the most cost-effective way for buyers to personalize their homes.”

One more example is addition of first floor space. A popular option at Next Generation Development has always been a sunroom or four-season room. Such an addition calls for significant modification of roof and foundation as well as windows and doors. “But it can be cost-effective because it’s already been drawn by an architect, pre-designed for the home, and it’s already been priced out,” Payonk says. “The cost analysis has been done.”

In the case of a semi-custom home, designing to buyers’ distinct preferences involves consultation, says Court Airhart, president of West Chicago’s Airhart Construction, building semi-custom and custom homes throughout DuPage County. “We have people who come in with photos, people who come in telling a story, people who have pulled some things out of a design book and say, ‘Can you take a living room from this and a kitchen from that?’ ”

Airhart has on staff a designer whose initial drawings are seen as more of a starting than an ending point, he says. As buyers work with the design and sales teams, the goal is to create a home as distinctive to their needs and desires as possible. It may be simply adding a bay, or a more complex transformation of several rooms into an in-law suite.

In the case of a custom home, the process begins with a blank page. “We started from zero,” says Anne Wanzenberg, who with her husband Matt is having Airhart Construction build a custom home in the western suburbs. “We had the lot, and restrictions on size based on lot size. We looked at other plans online, other elevations online and other homes in the neighborhood. Then we thought about things we wanted in a house, and how we would use the house. They started with those things and designed it from scratch.”

Among the home’s distinctive characteristics is that it has no formal living room, but does have a piano room. It also has a dog crate built into the mudroom. “And we have a very open kitchen and family room area,” Wanzenberg says. “We spent a lot of time designing the home. We’ve had a really, really great experience doing this.”

When the architects at Harting’s firm begin designing a custom home, they start with the front of the house, mindful that the presentation should represent the homeowner. Whether a formal Georgian or perhaps an Arts and Crafts style, “It should be about who this family is, and what they’re about,” he says. “They may say they like Colonial, but as you draw them out it becomes apparent they’ve always been attracted to red brick, white trim and green shutters, but not necessarily every aspect of a center-entrance Colonial.”

The takeaway? Even in a production home, it is possible today to give it a distinction that wasn’t available even a few years ago. Says Payonk: “In this market, the difference between new and resale is the fact you can personalize a new home, with greater economies than you could remodeling a resale home.”