This suburban Dallas project is a poster child for move-up specialist David Weekley's new Imagination Homes, a venture into the affordable market where the value proposition rests on limiting selections so the houses can be built very fast.
"These are still high-design houses, with a lot of architecture and features similar to our Weekley Homes lines," explains Joe Vastano, Dallas division president, "but we limit choices in order to simplify construction and speed up scheduling. We start the homes in less than three weeks and close them three months after contract. Our build time is 48 working days, on a five-day workweek. Hard costs average $30 a square foot (materials and labor only), even with the materials price increases we've had this spring."
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Two model homes at Chestnut Meadows opened in June, 2003 and garnered 64 sales in less than a year. The 2,155 square-foot, $146,000 McGee, shown left, with family room interior above (top), is the best seller with 21. The 2,650 square-foot Owen two-story, above, has 11 sales.
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See the McGee floorplan
The McGee floor plan wows buyers with huge family room/kitchen/nook combination and children's retreat flex-space that 80% of buyers take as modeled. Houston interior merchandiser Kathy Andrews uses bright accent colors to show off light penetration in spaces such as Owen master suite, shown below. |
Opportunities
With mortgage interest rates still low and job creation beginning to boom again, company chairman David Weekley likes the looks of housing opportunities below the $200,000 price barrier. Trouble is, he can't get there much anymore with the company's move-up product, which allows buyers to choose from reams of options and even make virtually any custom change they want. "Choice has always been a cornerstone of our value proposition, so Imagination puts us through a real culture change," Vastano says.
However, Weekley wants Imagination to eventually generate 50% of the company's revenue, which hit $948.6 million on 3,549 closings in seven states during 2003.
Chestnut Meadows was set up as an acid test of the Imagination concept when Vastano's land acquisition team in Dallas put together a deal for a rolling option on serviced lots averaging just $29,500 each, in an established community with good amenities (an elementary school, walking trails, etc.).
Weekley believes there's a niche in the affordable market for a high-design product with a little more square footage than basic detached bungalows and architectural treatments such as volume spaces, open sightlines and lots of light penetration. "Most of our plate lines are 9 and 10 feet," Vastano says. "Even where we have an 8-foot side plate, we slope the ceiling up to 10 feet. We define spaces with columns and drop beams, and bring a lot of light into family rooms and kitchens."
"There's no difference in construction quality between these houses and our Weekley homes," Vastano says. "Materials and craftsmanship are the same.
The Chestnut Meadows houses are 80% brick and 20% fiber-cement siding. We do offer six pages of options, mostly in flooring, hard surfaces, plumbing and electrical. But we've worked with our trades to package them, and we don't let buyers go outside the catalog at all."
In fact, Weekley doesn't allow Imagination buyers to even visit its 40,000-square-foot New Home Center in Dallas where DWH buyers make their option and upgrade selections.
Obstacles
The 90 lots Weekley picked up are in Phase II of Chestnut Meadows. Competitor Horizon Homes, the entry-level division of Highland Homes, already had four model homes open for a year and more than 60 sales on the books in Phase I. "They had a big head start on us in the affordable market," Vastano says. "Their product is good, and they're a tough competitor. Moreover, young buyers - especially entry-level - are very visual. They're not interested in buying something - especially a home - they can't see and touch. So we struck out when we tried to pre-sell last spring, before we got our models open in June."
Fortunately, Weekley was able to buy 14 lots in the old phase and start spec houses on all of them while they built two model homes. With systems in place for Imagination, Weekley had its first closings only three months after entering the community.
Outcome
Shown here are the two Imagination models Weekley opened at Chestnut Meadows just a year ago, which pulled in 64 sales by early May this year. One of them - the 2,155 square-foot, $146,000 McGee ranch plan - is the best seller with fully one-third of the sales. "Buyers like the flex-space in this plan, which we show as a children's retreat, but it could be a fourth bedroom or home office. About 80 percent of buyers have it built exactly as we show it," Vastano says
Notice that there's no living room at all, with most of the space concentrated in the open family room, kitchen and breakfast nook combination. Practically no space is lost to hallways in the highly efficient floor plan. A big master bathroom and walk-in closet provide a sound barrier between the master bedroom and kids' rooms toward the front.
Weekley builds the McGee for $31.75 a square foot in hard costs (materials and labor). The two-story, 2,650-square-foot Owen, priced at $160,000, can flex to as many as six bedrooms, yet it still fits on a 60-foot lot with a footprint less than 50 feet wide. Weekley builds the Owen for $30 a square foot in hard costs.
