New-home buyers lured with incentives

The requests for smaller homes have become more numerous and frequent.

While a majority of homebuyers 55 and over are seeking homes approximately the same size as their present home, builders catering to the age group can no longer afford to ignore the cash-strapped population demanding a smaller alternative to the 2,400-square-foot new home.

"We had a recent request for a new home half that size," said Brian Gentry of Landed Gentry Homes and Communities and a member of the National Association of Home Builders senior housing council. "The 1,200-square-foot home used to be built only on an odd lot where we could build little else. Now, it could be more of a mainstream product."

Gentry joined a handful of other "over-50"-focused builders from different regions around the country on a recent panel discussing "no risk" strategies for 2010 and beyond. They all are also grasping for ways to help potential customers sell their present homes and finance the new ones. Empathy has taken center stage because if a sale does not take place, few potential customers can afford to buy a new home.

Several builders are emphasizing the fact that new energy-efficient measures allow them to compete with the costs of resale homes and foreclosures. Others are stressing upfront benefits of lifestyle and location: creative, attached "jewel boxes" that appear to be separate and independent from the street, with fewer included amenities like upscale cabinets and soaking tubs, allowing for bargain-basement pricing.

Many are trying to reduce land costs by working with lenders who have taken back property from other sources. Developers say if they can minimize their acquisition costs, the savings could make their finished-product price point more appealing.

One builder is offering new buyers a price guarantee, promising that any home purchased in one of his communities will retain its value until the community is sold out. That guaranteed time frame is estimated to be about two years.

Another builder is presenting a plan to help shoulder any loss on the sale of the present home, volunteering to pay half the difference between an appraised price and its eventual selling price. ...CONTINUED

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