VOL. 126 | NO. 1 | Monday, January 3, 2011
Change of Pace
By Sarah Baker
In this buyer’s market, one local homebuilder is responding to customer feedback in a big way – by going small.
Realtor Larry Russell of Magnolia Homes turns on lights in a model home at 5194 Adagio Lane in Lakeland’s Winstead Farms. The subdivision features French country-style homes. (Photos: Lance Murphey)
After a slow 14 months, construction on Magnolia Homes Inc.’s speculative homes on four lots in Winstead Farm LLC’s Lakeland development is well under way. Out of Winstead’s 77.4 acres and 115 lots, Magnolia has bought 94 lots with plans to acquire more.
Because Lakeland is trying to keep home values elevated, it’s difficult for homebuilders to enter the market with a low price point. While the area’s accessibility to Lakeland Elementary School and no city property tax are huge selling points for buyers, prices remain high and sales have subsequently suffered.
Sales in the Arlington/Lakeland ZIP code of 38002 are down 11 percent year over year through Nov. 30, according to the real estate information company Chandler Reports, www.chandlerreports.com. (December data was not available by press time.)
While most of Magnolia’s current homes in Winstead Farms are priced between $450,000 and $525,000, this latest batch of homes will range from $300,000 to $350,000, with a starting price of $250,000. The homes will also average 3,000 square feet, as compared to the previous 3,700 average.
“We feel like we’re offering something in Lakeland that’s never been offered before,” said Reggie Garner, partner in Magnolia Homes.
Magnolia Homes has answered customer demand with a lower-priced product in Lakeland’s Winstead Farms.
But the smaller space and price tag isn’t just in response to market dynamics. In November, Magnolia Homes held a party at Coletta’s Restaurant for about 40 people who had visited model homes during the past year but said prices were too expensive. Magnolia Homes employees then surveyed the attendees, asking them their thoughts on new plans and amenities.
“We took that and kind of came up with a new production, a new direction to go,” Garner said. “It was really neat to see people that didn’t know each other but were interested in the same thing, and to watch them sit around a table and say ‘Hey, we need to be neighbors.’”
Per survey requests, amenities will include eight-foot tall insulated garage doors, reasonably sized yards, Venetian bronze faucets, a choice of hardwood or tile in the main areas and a “bench and hooks” area – a small mud room.
Every house comes with a signature Magnolia tree in the yard and an engraved Magnolia leaf on a limestone block by the front door, something the company does for each of its homes.
“It’s kind of like a birthmark,” Garner said. “It’s funny because if it ever doesn’t get put in on a house, people will call and say, ‘I want my Magnolia block’ – people like them.”
One area Magnolia pinpointed in its new plans was creating open floor plans and covered porches. Buyers have the option of six different plans or customizing a plan to fit their needs.
“People aren’t home as much as they used to be, so when they’re home they want to be with their family,” said Garner.
In addition to modifying houses, Magnolia has also ramped up its marketing efforts to appeal to its on-the-go customer base. The company hopes online mediums like Facebook, Google AdWords and a new website coming in February will make the homebuying process more user-friendly.
“The models used to be the first time for people to ever hear about Magnolia Homes, now with the Internet it’s their second or third visit,” Garner said.
Within the next month, Magnolia will have six or seven homes under construction, depending on the weather. For 2011, the homebuilder’s projection is 18 homes in Winstead Farms, an increase from seven closings in 2010.
Amid slow sales in the local and national housing slump, Magnolia’s forecast is commendable, said Bobby Winstead, managing partner of Winstead Farms.
“We’ve gone through a pretty tough time and they’re one of the few that are still standing, still being aggressive and building houses,” Winstead said. “That says a lot for them because there are a whole lot of these builders that aren’t here anymore.”
Magnolia’s most recent closing was a pre-sale, a testament to its reputation and ability to weather the bleak building climate.
“Magnolia Homes is still one of the hot builders with a very good product,” said Winstead.
Chandler Reports is a division of The Daily News Publishing Co. Inc.