A Wahsatch Winner

John Laing Home’s Utah Division finds an answer to a slackening off-cycle market.

By Patrick L. O’Toole, Senior Editor | September 30, 2000


Offering 1500 square feet in an amenity-rich master plan community, the four-bedroom SummerHouse is selling quickly.


With the 2002 Winter Olympics just 15 months away, one would assume that host Salt Lake City is in the midst of a period of prolonged economic growth.

And it is. But the economy of the metropolitan area, tucked along the base of the Wahsatch Mountains and commonly referred to as the Wahsatch Front, has been growing at slower rates for the better part of four years and the near-term outlook calls for more of the same. The local economy will likely taper off further as the flurry of Olympics-related construction winds down next summer. And when those construction-related layoffs hit, job growth is expected to drop down another notch. That is why home builders here are increasingly pressured to deliver value and priceù particularly at the entry level.

With its Picket Lane community in Tooele County, the Utah Division of John Laing Homes is clearly hitting the market with the right product at the right time. Laing is offering two one-story and two two-story homes that start at $97,990. Not surprisingly, all four have sold briskly since models opened on July 1.

The two fastest sellers are the three-bedroom, 1066 square foot, one-story Gingham, which starts at $104,940, and the four-bedroom, 1483 square foot, two-story SummerHouse, which starts at $119,440. Versus a current average selling price for the area of $158,864 for a typical three-bedroom home, both models rank high as our picks for Smarter Houses for the Money.


The two-story SummerHouse offers a large living space.


"Our biggest competition is the resale market and this product is very competitive, even against resale homes right now," says LaingÆs Utah Division president William Richardson.

Historical MLS figures for the area show that between 1992 and 1996, home prices on the Wahsatch Front escalated by about 75%. But since 1997, there has been "three full cycles" of gradually descending prices in the resale market, Richardson notes, putting builders at a particular disadvantage in the current market. "Builders can only discount so much, but resale units can go clear back to where they were before the escalation."

A Multi-Buyer Strategy

According to Richardson, Picket Lane represents the fruits of long-term efforts by the company to secure entitlements for lots about half the size of the 10,000 square foot norm for the area. The aim is to begin to attract resale home shoppers.



The SummerHouse has plenty of storage area at the rear of the garage (top) and a master bedroom large enough to allow for a nursery option.


But beyond that immediate goalùgoing back to the early 90s and the days when the division operated independently as Watt Homesùthe company has pursued a conservative market strategy to offer homes for a wide range of buyers. Picket Lane is the companyÆs first truly entry-level offering to result from this strategy, notes Richardson.

Through most of the 90s, Watt, then Laing, built approximately 400 first and second-move-up homes on larger 10,000 square foot lots in the master planned community of Stansbury Parkùthe same master planned community where Picket Lane is located. Last year, as the local housing market further slowed, Laing purchased more land in Stansbury Park, this time offering Tooele County planners a generous package of land set-asides for parks and schools including 35 acres for the construction of a new high school. In return, Laing won approval for its Picket Lane map. That plan includes 390 lots at or near 5000 square feet in two distinct configurations.

About 200 of the lots are of a 50x100 configuration while the remainder (yet to be phased in by Laing) are wider and shallower at 60x83. SummerHouse, Gingham and the two other models were designed to fit the narrower and longer lots. Another entry-level product is on the drawing board to fit the wider and shallower lots.

The fact that Picket Lane is being offered in the Stansbury Park master planned community also accounts for a significant portion of the value these homes offer to buyers in the market. Master planned communities are few and far between in Utah and none offer the same combination of amenities and price. Initially developed in the mid-70s by the first of two development firms, Stansbury Park is loaded with tennis courts, basketball courts, large parks and tot lots, as well as an 18-hole championship golf course, way above the norm for entry-level homes.

From a design standpoint, Laing turned to Costa Mesa-based architect Mike Woodley for four homes with square footages starting in the 900s on up to 1400 that could fit on relatively narrow 50x100 foot lots. The resulting floor plans were just right for first-time "and even some move-down" buyers, says Richardson.


The one-story Gingham model is the fastest seller among the four at Picket Lane. The three-bedroom home offers plenty of space for a two-child family at a price well below the average for the area.


A theme among all the floor plans is flexibility and lots of storage space. In the Gingham, buyers are offered a large kitchen, living and dining room area that can be altered to allow for a second full bathroom. About a quarter of the space at the back end of the two-car garage is devoted storage.

The two-story SummerHouse offers a very large 14x21 foot master bedroom that can be altered to allow for a separate sitting area, nursery or tech center. In addition, a pantry and a laundry just off the kitchen can be modified to allow for a first-floor powder room. Similarly, a large portion of the garage at SummerHouse is devoted to storage space.

Both models offer three elevations in stucco or siding as well as the option of a small entry porch. The prices for the different elevation options were deliberately kept low, at $1000, to keep most buyers from settling on the same standard elevations, says Richardson. He also points out that larger-than-average windows and above-base-grade fixtures, finishes and kitchen cabinets come standard in the Picket Lane line, while keeping hard costs per square foot at $48. This might seem high, but it is low for a market that Richardson characterizes as "off-cycle" with most of the rest of the country.

The Wahsatch Front boomed earlier than most areas of the country and was among the first to begin absorbing higher prices for material and labor that continued to rise in concert with higher costs generally seen throughout the Western U.S. As an example, Richardson points out that cement is running almost $20 a yard higher than it was five years ago. "Believe it or not, but it costs more money to build here on a per-square-foot basis than it does in California at the moment."

Part of a Good Long-Term Outlook



Floor Plan


Though job growth in the region is now hovering at about 2% per year, down from 6% in 1996, things should be much improved over the next few years for builders active in the Wahsatch Front. Computer chip maker Intel is building a factory that will eventually employ 4000 and Gateway Computers is also building a facility nearby. Richardson also notes that the local economy has become more diverseùdepending less and less on its mining and ranching roots for jobs. "The troughs are shallower," he says.

Meanwhile, the company is seeking to purchase two more pieces of land for its Picket Lane product in other communities in the Wahsatch Front in addition to its lots in Stansbury Park.

All of this goes to support one basic fact about the regionÆs home buyers, says Richardson.

"The thing about Utah is that people here tend to be bargain shoppers. We have more discount stores here than any other state in the nation. They are looking for a real high value in anything they buy."

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