Building on success: Despite slower start, builders expect busy year in 2014

2014-05-04T00:00:00Z 2014-05-04T23:49:06Z Building on success: Despite slower start, builders expect busy year in 2014By TOM HOWARD thoward@billingsgazette.com The Billings Gazette

If there’s one thing Rod Wilson has learned in his career as a real estate developer, it’s that spring weather always brings customers to his door.

Wilson estimates that about 40 percent of his sales at Trails West Subdivision take place in the spring. In order to meet that demand, construction crews have to stay busy throughout the winter to build inventory for the selling season. That means digging foundations in the fall and winter and working throughout the cold months to keep a steady supply of new houses on the market.

Wilson said his crews managed to keep busy despite a rugged winter that featured 100 inches of snow and several sub-zero cold snaps. One of the most important pieces of cold-weather equipment that came into play last winter is a special heater that thaws frozen ground so that footings and foundations can be poured. Warmed antifreeze circulates continuously through the heater’s 4,000 feet of flexible hose.

“You lay that down and put some tarps over it, and within a couple of days the ground gets warm enough to where you can pour a foundation,” Wilson said.

During an earlier era, it was common for contractors and tradesmen to take time off during the winter because the weather made it harder to get the job done. The thinking was that if they started hustling in the spring, they could make a decent living as long as the weather held.

“I believe that the world has changed,” Wilson said during a sunny spring morning, as workers moved through houses in various stages of construction. “We need to be ready for the market and be prepared.”

Trails West, located south of Grand Avenue near 56th Street West, has built about 30 homes per year since it opened in 2010. Up to 300 homes will be built when Trails West is fully developed.

Wilson doesn’t offer lots within Trails West to other builders. Each home is built by the same crews, a system that Wilson finds to be efficient and cost effective.

“My framing crew can frame a house in 10 days,” he said. “That’s as fast as we can go. We keep good quality control and we have one team for every one of our disciplines, whether it’s painting, framing or carpet.”

Trails West offers just under a dozen models priced between $240,000 and $290,000. With spacious front porches, sidewalks and fenced yards, Trails West is designed to be a neighborhood, Wilson said.

Large homes that were all the rage during the early 2000s fell out of favor in the wake of the 2008 housing crisis.

These days, many builders continue to focus their efforts on houses that are efficient and provide popular features.

While few are predicting a return of the McMansion era, builders say a few buyers are starting to shop for homes with a few more features or a bit more square footage.

Earlier this year, Billings ranked No. 27 among 350 metropolitan areas analyzed in the National Association of Home Builders/First American Leading Market Index. It’s one of 56 metropolitan areas where the housing industry is operating at above-normal levels, according to a formula that takes into account building permit activity, housing prices and employment data.

Ty Lantis, co-owner of Image Builders and president of the Home Builders Association of Billings, expects another good year for the Billings new-home market. While larger homes aren’t in vogue like they once were, many customers are looking for amenities such as fancy kitchens and deluxe sound systems, he said.

Wilson has tweaked some of his home designs, adding extra square footage to accommodate walk-in closets and slightly larger rooms.

A model named the Beartooth was expanded from 1,800 square feet to 2,200 square feet and has been offered as the Beartooth Pass.

“We increased the size of our two-story home and did some changes that we think are great,” Wilson said. He was also surprised with the popularity of a 1,515-square-foot single-level rancher known as the Mystic.

“It has a 34-foot-long deep covered front porch,” Wilson said. The model has proven to be popular with customers who are thinking about downsizing. “But we did sell one to somebody in their 30s,” he said.

Billings home construction returned to is pre-recession levels last year. The 409 housing starts permitted by the city of Billings were the most since 2007, when 427 were recorded.

Home construction was off to a slower start in the first quarter of 2014, and builders blame the weather.

Greg McCall of McCall Development, which is developing the Josephine Crossing subdivision south of King Avenue just east of Mullowney Lane, said last winter was the first one he had seen that featured significant weather-related work stoppages.

“In my career we’ve had the equipment and the ability to get through relatively mild winters, but this one took the cake,” McCall said. “We’re still seeing roads that should have been paved last September but they haven’t been. There’s just been so much moisture that we can’t get the ground to dry out.”

Fortunately, with the arrival of favorable weather, customers are coming back. On average, one customer per week is reserving a lot for construction, and McCall expects Josephine Crossing to maintain its pace of building 40 to 50 houses per year.

Josephine Crossing, which started in 2006, is also seeing repeat customers. McCall said a number of customers who bought a house several years ago are shopping for a new home as their needs have expanded.

Meanwhile, work continues on a house in Josephine Crossing that will raise money for a charity named Homes for Hope.

Proceeds from the sale of the house at 1716 Lone Pine Drive will be used to finance microloans, small business loans that help people start basic businesses such as a motorcycle repair shop, a grocery store or a sewing shop. In the past, 98 percent of the loans have been repaid, McCall said.

Last fall, McCall and his wife, Erin, traveled to the Dominican Republic to witness the efforts of Homes for Hope. A woman he met explained that she had started a successful store with her $50 loan.

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