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Builders: New-home market holding steady

Thu, Oct 16th 2008 12:00 am
By MATT CHANDLER

It is increasingly difficult to go anywhere these days without being bombarded about economic doom and gloom.

From rising gasoline prices to the mortgage crisis to the looming $700 billion Wall Street bailout, it would seem that Americans have good reason to pause when it comes to making a major purchase such as a new home.

The latest national numbers show a dip in new-home builds over last year. A survey compiled by the National Association of Home Builders shows new builds down 6.2 percent over 2007. However, according to several Western New York builders, the downward trend hasn't reached Buffalo - yet.

Jim Marrano, vice president of operations with West Seneca-based Marrano/Marc Equity, said his company hasn't seen much of a trickle-down from the current economic woes.

"The economy may be affecting things somewhat," he said, "but to be honest, our sales and starts are about the same as last year."

Marrano said his company has seen a spike in the cost of materials as of late, and he said that may ultimately impact the housing market in Western New York.

"We have started to feel the pinch (on building materials), but we are doing our best to use our buying power to keep the prices down," he said.

David Stapleton, owner of David Homes, echoes those thoughts, saying the economy doesn't have the impact one might suspect on new-home purchases.

"Since most of our homeowners are building a home for the long-term and not a short-term lifestyle, they are less impacted by the overall U.S. housing market," Stapleton said.

However, the economy certainly has his customers doing more research before they buy. In the end, it comes down to homeowners knowing how much house they can afford and staying within their means.

"As a group, our homeowners are in pretty good shape financially and make prudent buying decisions," he said.

Danielle and Johnny Kalinski fall into the prudent-buyer category. The Lake View couple just moved into a new $260,000 Marrano home in July. Danielle Kalinski said that initially, the couple worried that building might be too expensive, but once they took a look at the numbers, it made sense.

"What we were going to get was so much more than we could find in an existing home," she said.

Kalinski said the incentives available to new homebuyers made it an attractive option for them.

"We are looking at it as an investment too," she said, "and for us, a new home seemed like the better investment."

Area builders credit lower interest rates, and a Buffalo market that has held steady while other parts of the nation have fluctuated wildly, as being the biggest influences on the stability of new-home sales.

But do economic concerns have homebuyers cutting corners and leaving off the granite countertops, fireplaces and other housing amenities? Jim Marrano said not to any noticeable degree.

"With a good interest rate, the money it costs for the upgrades people want isn't going to significantly impact their monthly mortgage payment," Marrano said. "A big part of why people choose to build is so they can customize their home, so we aren't seeing that change."

As for the future, Marrano advises, stay tuned. "It is hard to say what will happen," he says. "As a company, we always plan for the worst-case scenario, but in the end, we'll just have to wait and see."

Matt Chandler is a Hamburg freelance writer.