ENERGY SAVINGS, MINERAL RIGHTS, BIGGER HOMES DRAW BUYERS
December 3, 2009
by Janice Crompton, Pittsburgh Post-Gazette
The national real estate market may be tanking, but local developers say they are finding ways to appeal to customers by building more energy-efficient homes, selling properties with the mineral rights intact and constructing upscale developments.
Niche builders continue to erect gigantic, multi-million-dollar homes in quiet enclaves south of Pittsburgh, especially in areas such as Washington County, where vast tracts of farmland are being converted into luxury estates with homes as large as 55,000 square feet — the size of the White House.
As one of only two counties in the region to experience population growth during the most recent census, Washington County appeals to home buyers because of its rural flavor and low real estate taxes.
Northern Washington County and southern Allegheny County also attract families because the areas are home to some of the state’s top-performing school districts, including Mt. Lebanon and Upper St. Clair in Allegheny County and Peters in Washington County.
Local officials say the area has felt a hiccup from the national recession, but real estate professionals claim they still have a multitude of customers willing to shell out at least $500,000 for large homes on private lots. The primary pinch from the sinking economy, they say, is being felt in more crowded subdivisions with homes below that price range.
From October 2008 to last month, the U.S. Census Bureau said, housing starts across the nation are down by 40 percent from 812,088 last year to 483,013 so far this year. The Pittsburgh metro region fared a little better, down about 22 percent from last year, the bureau said.
Kids gone, more money
Still, “we’re getting a lot of empty-nesters that seem to have pots and pots of money,” said Prudential Preferred Realtor Susan Brunko about some of the developments she’s selling in the Peters area.
One such development that is continuing forward despite the softening market is a new, 53-acre residential development at the site of the former Anthony Farms, along East McMurray Road.
Divided into about 61 lots, the homes there are planned to be smaller but more expensive than surrounding developments, with prices starting at more than $600,000.
Ms. Brunko said the homes were appealing to experienced buyers who are interested in attached garages, first-floor bedroom suites and kitchens equipped with features such as granite countertops and premium appliances.
“This is what our empty-nesters have been looking for,” said Ms. Brunko, who has received deposits on eight lots so far. “They have the cash to do it. It’s a different niche.”
On the other side of the township, developer Martik Properties isn’t having as much luck with a new townhouse development. The company asked Peters officials in May for permission to adjust building plans to scale down the size of the homes, allowing the company to slash prices from $300,000 to about $240,000 per unit.
The six-acre development on Venetia Road, called Venetia Pointe, still hasn’t sold a unit, according to property Manager Kip Carroll.
“It’s off everywhere,” he said of real estate sales. “There’s still building going on, but not as much as there was.”
The developer of The Berkshires in South Fayette also requested a change in design plans from apartment buildings to single-family homes earlier this year, while Collier officials recently turned down a request to downsize townhouses in the Villages of Neville Park development.
Still others have suspended construction or lowered asking prices.
But small, specialty home builders, including Lewis Keith of Keith Homes and Don Horn of Jerry Horn Construction, are continuing to thrive despite the economy.
Mr. Horn, who builds period-style homes, recently finished a 7,500-square-foot, $1.4 million stone home in Somerset Township, Washington County. Mr. Keith is offering buyers in his Sycamore Reserve development in North Franklin “Energy-Star” certified homes with coal rights, so owners don’t have to be concerned with being undermined.
That’s a big deal in areas such as Washington County, where homeowners routinely battle coal companies over damages caused by longwall mining.
New energy-saving building techniques also help the environment and save homeowners thousands of dollars, he said.
“It gives us a competitive edge in the market because [our homes] are more energy efficient and they are quality homes,” Mr. Keith said.
Mr. Keith said his sales were off about 30 percent from four years ago, which mirrors most other new housing developments in the area. But, he said, demand is still relatively high in an area that didn’t experience much of a building boom during the past decade, thereby insulating it from the crash.
Larger home builders, including Heartland Homes and Ryan Homes, have been offering incentives to potential home buyers, including free home theater packages, discounted prices for members of the military and special deals for first-time home buyers.
Qualified first-time buyers can still take advantage of federal tax credits up to $8,000 — the deadline has been extended from the end of November until April 30 — but Ms. Brunko said most of her clients were veteran buyers.
“We don’t have first-time home buyers in this group,” she said.
Growth areas
The South Hills and Washington County are likely to continue bucking national trends as the population is expected to continue growing.
According to estimates from the U.S. Census Bureau and the Southwestern Pennsylvania Commission, areas that have been largely built out, such as Upper St. Clair, Mt. Lebanon and Bethel Park, are expected to experience slight or no growth, while other locations should be bracing for major changes.
Some of those locations include Jefferson Hills, where developers expect to build about 1,500 new homes in the next 10 years; South Fayette, projected to grow by about 34 percent by 2035; and Collier and Baldwin Borough each expected to increase their populations by a more modest 13 to 14 percent.
The predictions for northern Washington County are staggering, with areas such as Peters, expected to grow by 60 percent in the next 26 years, and Nottingham, where the population is anticipated to increase by 53 percent.
Other locations include Cecil, expected to grow by 46 percent; South Strabane by 22 percent; and Chartiers by 21 percent. Overall, Washington County is expected to grow by almost 25 percent.
According to the U.S. Census Bureau estimates, the fastest growing municipality in Washington County from 2000 to 2008 was North Strabane, home to the Meadows Racetrack & Casino and a number of new housing developments.
Data shows North Strabane increased its population by 50 percent during that eight-year span, with no end in sight.
Township Manager Frank Siffrinn said Allegheny County residents were migrating south for lower taxes, decreased traffic congestion and home prices that are a better value.
“Certainly, taxes in Washington County are somewhat lower than Allegheny County, and housing is reasonable in North Strabane,” he said.
Real estate taxes are lower in Washington County because a countywide property reassessment hasn’t been done in 30 years. Recently, the county agreed to settle a lawsuit by two school districts and begin reassessments, though the county is asking to delay that plan until the state Legislature acts on property tax reform.
Hundreds of new homes are being built in North Strabane, although things were a little dicey this year, Mr. Siffrinn said. The township has picked up an additional $70 million in market value this year, not including a permanent casino that opened this year at The Meadows.
“We noticed a little bit of a slowdown this year, but by the third and fourth quarter of next year, we predict a minimum of 50 new housing starts,” he said.
The story is the same in Peters, where township Manager Michael Silvestri recently recommended a 2-mill real estate tax increase to offset lost development revenue, although Peters also is expecting a recovery by the end of next year, based on new developments under way.
“We are poised to be ready for an influx of [building] permits,” Mr. Silvestri said.
Still, as two of the fastest-growing municipalities in southwestern Pennsylvania, there is little to complain about.
“The development and growth in the township has been constant,” Mr. Siffrinn said. “We’ve been very, very fortunate. We think we’re in an excellent position.”
