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Looking for a way to differentiate your homes from those of the big public builders? Here's a strategy that's working for Houston builder Brian Binash and figures to become more popular as energy costs continue to rise.
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Like many private production builders, Binash's new Houston partnership with Austin-based Wilshire Homes needed to find a niche to avoid the Giant public builders congregating around the pricing midpoint of the market. In a robust economy, moving up in price makes sense. There are still plenty of buyers in a market like Houston at those higher prices, and room in the pro forma for differentiators like cutting edge design and personal service that the public builders have trouble matching. But Binash found an even more powerful differentiator to add to that mix — energy efficiency and indoor air quality.
It has the added attraction of generating, to buyers, increasing levels of return on their housing investment as energy costs go up.
"It's something I feel comfortable selling," Binash says today. "Buyers see it as a mark of quality, and every $7 a month in energy savings adds $1000 to the resale price of a home. So buyers see a payback not only in reduced monthly energy bills, but also in the escalating value of their homes. If our homes save $50 to $100 a month in operational expense, that's a significant benefit, well above the $3000 to $5000 it adds to our prices. And our savings are 40 percent greater than those of a basic Energy Star home.
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"We also find that affluent executives take the health and comfort of their families very seriously, and are willing to invest dollars in the purchase price to assure indoor air quality," Binash adds.
Shown here is the first model home Wilshire Houston opened — in February this year — and it demonstrates how energy efficiency and green building — working in concert with high design and posh finishing details — can create a positive selling proposition, and almost overnight brand awareness, with quality-conscious buyers at prices between $300,000 and $600,000.
Looking for a place for Wilshire Houston to make a brash opening statement in the marketplace, Binash found a rolling lot option position at Shadow Creek Ranch, a big southeast suburban Houston master-planned community. "I'd done business with the developers when I was running Emerald Homes," Binash says. "A builder backed out of a commitment to do estate homes on 125-foot (frontage) lots. I said I would take those lots if they also allowed me a position in 80- X 120-foot lots where I could sell houses in the $300,000 to $400,000 price range.
"It helps that we are in Houston, where there are many master-planned communities with lot takedown programs. We were able to get this model open fast. If we had to develop land, it would have taken a lot longer to get product on the ground."
Wilshire got a commitment from Shadow Creek for 71 lots in its initial phase, most of them 80-foot lots at an average serviced lot cost of $67,000. The product line for The Gables (52 80-foot lots) is ten plans ranging from 3099 to 4636 square feet, priced from $317,990 to $366,990. The 19 Estate (125-foot) lots have ten plans ranging from 3197 to 6320 square feet, priced from $383,990 to $557,990.
Binash chose to model the Sterling plan shown here, a 4325-square foot, $354,990 two-story brick home with four bedrooms, 3-1/2 bathrooms and an attached 3-car tandem garage in its base configuration. But it has multiple floor plan variations to meet buyer demands for customization.
Note how the entire floor plan, even on the second floor, revolves around the two-story family room at its center.
"We offer a three-year guarantee that the Sterling's energy consumption for heating and cooling will not exceed $93 a month," Binash says.
Reaching the energy efficiency and indoor air quality on display in the Sterling model is anything but easy. Binash worked at it for years with Emerald, before its sale to D.R. Horton. When he left Horton to launch Wilshire Houston last year, Binash made a commitment to move this product differentiator to an even higher level. He enrolled Wilshire in both the Energy Star and Masco's Environments for Living programs.
"Environments For Living is really about looking at the house as a system, and getting everything working together," says Dave Bell, building science manager for Masco Contractor Services. "All of Wilshire's homes have mechanical fresh-air ventilation as well as extremely tight construction. They are all pressure-balanced, with jump ducts in every bedroom. A lot of houses are built with central air returns, so when you close a bedroom door, that room is pressurized and the rest of the house goes negative."
EFL has three levels: silver, gold and platinum. A platinum level home is 30 percent more energy efficient than the International Energy Code.
Product Choices For Energy Efficiency
Every home is a kit of parts, and Binash chooses carefully to reach the level of energy efficiency he demands.
"We are the only EFL platinum plus builder in the country," Binash says, "and the secret to maintaining that level is consistent quality in the products and installation in every home. Workmanship on-site is probably the most critical factor. For instance, we use Johns Manville fiberglass batt insulation in the walls and blown fiberglass in the attics. But the most important factor is probably the zero tolerance installation of the batt insulation. We allow no cuts, no voids. Insulation fills the wall cavity from stud to stud and from inside the back of the wall to the drywall — completely — on every house."
Wilshire has a local green building consultant — Energy Sense — do computer modeling of the houses. "Every plan goes through a review process and scoring in our modeling program," says Energy Sense consultant Kathy Howard. "Our computer loves the Bosch tankless gas water heater Wilshire uses. That shoots energy savings up by 10 to 15 percent. The bigger a family is, of course, the more hot water they use, and the more that tankless water heater will save."
Wilshire has sold 24 houses in Shadow Creek less than four months, five of them Sterlings. "We could probably sell more Sterlings," Binash says, "except that Shadow Creek's architectural controls will only allow a certain number of them on each street. I think we can only build seven of them in the section we have."
Binash builds the Sterling for $59.25 per square foot in hard construction costs (materials and labor only).
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Major Products Used:
Appliances: Whirlpool: www.whirlpool.com
Cabinets: Aristocraft: www.aristocraft.com
Tankless water heater: Bosch: www.boschusa.com
Radiant barrier roof decking: Polar Ply: www.polar-ply.com
HVAC: Amana: www.amana.com
Windows: Fisher: www.fisherwindows.co.nz
Fascia and exterior trim: James Hardie: www.jameshardie.com
Lighting: Nora: www.noralighting.com
Insulation: Johns Manville: www.jm.com
Engineered wood products: Weyerhaeuser: www.weyerhaeuser.com
Programmable thermostats: Honeywell: www.honeywell.com
Paint: Monarch: www.monarchpaint.com
Plumbing fixtures: Delta: http://deltacom.deltafaucet.com
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