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THE HOMEBUILDING INDUSTRY
in Full Bloom
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By Laurie Burstein
From the City of St. Louis to far West County and points in between, all kinds of new homes and communities are springing up. Downtown lofts and historic rehabs in the City are on the rise, while new developments in St. Charles County continue to boom. Builders and buyers alike say the
St. Louis metro area housing market is ripe with many options for all lifestyles.
“There are a lot more choices today for homeowners in St. Louis,” says John Eilermann, president of McBride & Son Homes, the largest builder in the state having built 1,500 homes last year. “From cottage homes, town homes, row homes and neo-traditional homes, our market is seeing a more diverse product than we have ever seen.”
Eilermann adds, “The fact that community growth is going in all directions including the re-emergence of housing in the City has been great for our region. St. Louis is a healthy market for our industry and for homeowners.”
 John Eilermann, president of McBride & Son Homes. |
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Patrick Sullivan, a 25-year veteran and executive vice president of the Greater
St. Louis Home Builders Association, seconds the strong housing market. “The
St. Louis market is doing very well. It would be accurate to say that we are experiencing a housing boom and have been almost non-stop since 1991. Compared to the nation as a whole, St. Louis is not a boom or bust market. We pretty much roll along steadily, year-in and year-out, with between 9,000 and 11,000 new home starts in the metro area,” Sullivan says.
Sullivan adds, “In recent years, there is more optimism from builders and outright excitement among buyers about new home choices and their features.”
One trend includes smaller homes requiring less maintenance as more people approach retirement. More buyers don’t want to mow grass and shovel snow, but they want the bells and whistles of new construction such as open floor plans, high ceilings, large windows, walk-in closets and pantries, special purpose rooms, energy efficiency and outside security. More builders are offering technology upgrades such as wireless computing options and homeowners are responding.
| Tom Hughes, founder, T.R. Hughes. |
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Tom Hughes, founder of T.R. Hughes in St. Charles, says the trend is definitely towards smaller homesites, making ranch homes and attached villas very popular. Hughes, a former police officer for the City of St. Charles, started building homes in the early 90s. The company has 13 developments in St. Peters, St. Charles, O’Fallon, Mo., and in Fairview Heights, and recently began a project in southern Illinois.
“As the Baby Boomers are approaching 60, they are looking for single-level living filled with architectural features, but they also are looking for a home that is as maintenance-free as possible,” Hughes says. “And, as land and development costs skyrocket, the only way to hold overall housing costs in line is to reduce the size of homesites.”
(Left to right): Lew Oliver, Greg Whittaker, president and CEO of Whittaker Builders Inc.,
and Andres Duany at the New Town Center. |
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Higher density homesites are often desired by buyers and can be done in a very positive way. Greg Whittaker of Whittaker Builders Inc. explains, “I think homebuyers lead very busy lives and would like to simplify as much as possible. It used to be that people would go further out for more square footage and bigger homesites. Now, many prefer a smaller site, because there is less to take care of.”
Another trend Whittaker describes is
master-planned communities such as the one his company is building called New Town located in St. Charles. The $1.3 billion dollar project features a mix of homes in housing types woven into a community with commercial, wide-open green spaces and lakes and canals. New Town will be built in ten phases with more than 5,000 residences built over the next 10 to 15 years.
The housing mix includes condos, single family homes, detached townhomes, custom homes, senior courtyards and homes where storeowners can live above their retail establishments. These homes range from $100,000 to $1 million for custom homes. An amphitheater, YMCA, movie theaters, restaurants and hotels will be part of the community. In the first phase, 28 businesses and 400 homeowners will begin moving in this month.
“This environment encourages walking and biking first—automobiles second. It definitely appears as if people are ready to return to the type of towns that were built before World War II where retail and other services were incorporated into the neighborhood,” Whittaker says.
What about the so-called smart home trend? Whittaker says, “We are going toward smart building principles and will begin using ground source heat pumps and windows with LoE2 Argon filling for greater efficiency.”
Just as new developments are springing up in St. Charles, Wentzville and beyond,
new construction has taken off in the City
as well. Greg Vatterott, president of
Charles F. Vatterott, which has built 25,000 homes since the company was founded in 1919, says he is seeing more demand for new housing in the mid-income range in the City.
“Mid-income buyers want new construction in the City ranging from $190 - $325,000. The difference we are seeing today is more demand for new construction in the City—many don’t want to tackle rehabbing a 90-year old house,” Vatterott says.
Vatterott’s company was responsible for building the Gate District in the City near the South side between Lafayette and Chouteau with 180 mid-priced units selling quickly. Another successful development in this price range includes Botanical Heights built by McBride & Son Homes. These new homes were designed to blend in with the style of the rest of the neighborhood and range from the $150s to the $250s.
| Greg Vatterott, president, Charles F. Vatterott. |
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St. Charles-based builder Hughes, who has not yet built in the City, says the revitalization of the City is great for all homebuilders. “The more I see regarding the resurgence of the City of St. Louis, the more I would like to find a homebuilding project there,” he says.
The teardown/in-fill market is also strong because it generally happens in prime locations like Frontenac, Ladue, Town and Country as well as the City. In the case of in-fills, developers find small parcels of land in existing residential areas and usually build anywhere from 10-20 higher-end homes. These are often snapped up quickly and Eilermann says his company recently had buyers camp out the night before homes went on the market to be the first to write a contract.
So what’s ahead for the housing market? Whittaker says more urban lifestyle communities will be built. “I think we’ll continue to see the new urbanism philosophies and principles come to fruition in this region because many buyers are seeking this lifestyle.” He adds, “We’ll see more communities like the New Town at St. Charles as well as the revitalization of Downtown St. Louis.”
Eilermann agrees on more growth. “ I think the continued growth in the City of St Louis is a big issue. But the largest perhaps, is the influence the baby boomer market will have on the industry. People do not necessarily want more and more square footage. They want better locations, more bells and whistles, and less maintenance.”
The homebuilding industry has answered buyer’s diverse needs by bringing more
innovative solutions to create better homes for our region.
TOP TRENDS IN HOUSING
Pat Sullivan of the St. Louis HBA outlines some of the major trends in the St. Louis metro area homebuilding market:
City Living:
Housing in the City of St. Louis is definitely on the rise, with a gradual increase over the past several years. Stable and rising property values for existing residents is one by-product of this trend, which is expected to continue. All types of distinct neighborhoods and loft homes are being built and
renovated in and near the city. As a
percentage of the region’s housing,
St. Louis City is only about 5%. But just a few years ago, it was less than 2%.
Housing Trends:
St. Louis mirrors the national trends substantially. National surveys show that the average size of new homes may have peaked in 2003 at 2,330 square feet. Even though the size may be trending slightly smaller, there remains a huge demand for quality features inside a smaller space.
Suburban Living:
Even with an increase in city living, the primary housing activity has long been, and continues to be, west of St. Louis in the suburbs, with the hottest part of the market shifting even farther west in recent years. Mid-St. Charles County-on-west is still exploding with growth in both population and jobs. And despite some traffic congestion, the County and the cities there have done a superb job of planning so that the quality of life continues to get better and better. O’Fallon, Mo. is a prime example and has been one of the fastest growing cities in the Midwest for the past 15 years.
Lincoln County:
The emergence of Lincoln County on the metro’s far northwestern edge, where new home building mostly in southern Lincoln County (immediately north of
St. Charles County) is now running at more than 5.6% of the metro area’s new housing on an annualized basis.
Region as a Whole:
In the region as a whole, more than 30% of all new housing is built in
St. Charles County. St. Charles County has been by far the hottest market for the past decade. St. Louis County is currently second, with 17% of the total market share. Jefferson County is third at about 12.3%. The top Illinois county is St. Clair with a 12.1% share. Over the past three years, the numbers have changed very little as to the percentage breakdown between the two states. In 2002, Missouri had 76.8% of the metro’s total share of new housing. Thus far for 2005, Missouri has 76.2% of the total. But Illinois has gained on Missouri slightly compared to five or 10 years ago when Missouri was typically about 80% of the total.
Biggest
Unmet Housing Need:
One of our region’s most critical unmet needs is for “workforce housing” which might be described as housing for those who are employed, but are at the lower end of the pay scale. Finding housing in neighborhoods where they want to live and can afford has been a growing challenge for many years. This is a national problem—not unique to our region.
Sources: In addition to the HBA of Greater St. Louis, some data on housing trends was taken from a recent survey of homebuyer preferences conducted by the National Association of Home Builders. Statistical data on market share was taken from MarketGraphics Inc., based in Brentwood, Tenn. |
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