By Callan Smith | Rose Law Group Reporter
Top homebuilders gathered this morning to talk Pinal County housing for Pinal Partnership at Trilogy at Encanterra, a Shea Homes Master-Planned in San Tan Valley.
The community was purchased by Shea in 2005 before the downturn and encompasses 745 acres, with a golf course, 22 acres of lakes and a club house, with 560 sq. ft. of indoor and outdoor space. It’s a successful community for Shea, said Levi Shill, General Manager of Trilogy at Verde River & Encanterra, a Trilogy Resort Community.
Not far from Encanterra, Fulton Homes has Ironwood Crossing, which it has been building for nine years. The masterplan anticipates 2200 homes with about 200 left to sell. The community has a very active HOA, which is unusually welcoming to newcomers. The homeowners took it upon themselves to create a social group, using Facebook and activities.
“It’s the most outstanding HOA that we’ve ever seen. It’s so important to have happy homeowners are they move in, which will make a homebuilder’s future,” Dennis Webb, Fulton Homes vice-president of Operations, said.
“We’ve invested tens of millions of dollars into Pinal County and see it as high growth potential area,” said Mike Kern, President of Communities Southwest.
Lennar is bullish on Maricopa, said Jeff Gunderson, sr. vice president of Lennar indicating that
models should be open at Alterra in June.
“We love Pinal County,” Gunderson said, “we’re thinking San Tan Valley and Maricopa are set for good growth.”
El Dorado Holdings was the first master-planned development in Maricopa with their Rancho El Dorado Chris Grogan, partner at El Dorado Holdings, said, “we are very excited that [the home builders] are very excited about being back [in Maricopa]. You all left, we are still there! We are glad you are coming back. We have six to eight thousand acres at multiple levels of entitlements and we are excited to start working on those deals.”
“We consider the homebuilders our partners. The deals need to work for them as much as they need to work for us. We in the room have the brainpower to figure out what we can control, the supply side. We should all be excited about what we can’t control; the demand is strong. That is the opportunity in today’s market.”
Pulte has invested “half-billion invested into the state between phoenix and Tucson,” Greg Abrams, vice president, Arizona division of Pulte Group, said.
They currently have 3,000 acres left to develop at Merrill Ranch in Florence, another prominent Pinal County community.
“We’re happy to be in Pinal County, it’s been good to us,” Abrams said as they appear on track to close 300 homes in Merrill Ranch this year.
Beyond the positives of sales and buyer interest, builders are facing tighter margins due to labor, material costs and transportation.
For Fulton Homes, construction is running 20 percent higher and home prices can’t rise fast enough to help margins, Webb said.
Shea Homes is seeing anywhere from a 20 to 40 percent increase, and going forward that’s continuing, Shill said.
Almost all homebuilding has been on finished lots and utilizing infrastructure from the last housing boom, but “When we go forward and run out of finished lots and infrastructure, we’ll have to create methods to create less-sophisticated, more affordable infrastructure or home prices are going to have to go up to pay for that,” said Kern speaking of the use of Community Facilities Districts and other public private partnership concepts.
The homebuilders were in all agreement, if they could get the houses built, the buyers are there, and there are solutions to the problem that they’ll need to work out.
Jordan Rose, founder and president of Rose Law Group pc summed up the sentiment saying “no one is up here worried about the general economic picture in our country but rather the biggest problem today is that you can’t build the homes fast enough for the buyers appetite and you want to be sure you keep the pricing affordable. If there is a thing called a “positive problem”, this is it….”