New-breed alternatives to single-family homes

Byline: STAN BULLARD

Nothing has embodied the new home market the past few years more than new-breed alternatives to single-family homes. Townhouses, cluster homes and condominiums with granite countertops, hardwood floors and easy living without the hassles of mowing grass or removing snow lured both builders and buyers for most of this decade.

Now, however, downsizing empty nesters are deferring that dream amid the housing slump, and in doing so they're creating sleepless nights for some suburban builders.

The market with the undeniable demographics of aging baby boomers behind it is in even worse shape this year than the single-family home market. In response, builders are redoing designs to cut prices, offering buyer incentives and even curtailing or walking away from projects as they try to weather the storm.

A grim sign of the changing market sits on the northeast corner of Cedar and Lander roads in Mayfield Heights. Concrete streets cover the former Locust Grove golf course. Pipes leading to sewer and storm drains jut from the ground rather than into as many as 48 townhouses that Kingdom Development Corp. had planned for the site. Instead, the Kowit & Passov real estate brokerage is trying to sell the site for the Solon-based builder.

Jeffrey Halpern, Kingdom president, said "a little bit" of concern about the state of the townhouse/cluster market is prompting the sale. However, Mr. Halpern said the larger factor driving the listing is that the site might be worth more as a mixed-use project than as housing.

"Maybe housing is not the best use of that land," Mr. Halpern said of the site that adjoins Landerhaven Corporate Park and is near Landerbrook Corporate Park. Both are huge office parks where thousands work.

But by forgoing the townhouses, Kingdom also would avoid competing with itself less than a half-mile west on Cedar Road. There, Mr. Halpern is readying the first eight units at Sunflower, a development of 27 townhouses costing upwards of $324,900 each.

Deals fall through

William Whitlatch, a builder with two decades of experience constructing cluster and patio homes geared to empty nesters, described that segment of the homebuilding business today as "really a tough market because the people buying in it are comfortably housed."

"They will not move if they have to lose money on the sale of their house" because of the housing market's woes, said Mr. Whitlatch, president of the Whitlatch & Co. homebuilding firm in Twinsburg.

"I've had people tell me they will put in a stair lift" before they will shed their two-story home at a loss for a single-level home prized by older people, Mr. Whitlatch said.

So far this year, Mr. Whitlatch said, he has had six deals for such properties fall through because prospective buyers could not sell their existing homes.

"Five years ago they could buy and know they would sell their existing home within 90 days," Mr. Whitlatch said. "Today they don't know if it's 90 days or 290."

Statistics from the Northeast Ohio Regional Multiple Listing Service (NORMLS) and the Centralized Real Estate Information Services of Akron (CRIS) illustrate how the housing bust has hit the market for condos and cluster homes particularly hard. The stats cover new condos only if the builders use licensed real estate agents for their properties, but also include the resale of existing townhouses, clusters and condos.

In the NORMLS region, sales of condos, townhouses and cluster homes through the end of August of this year totaled 1,932 units, down 13% from 2,216 in the like period in 2006. By contrast, sales of single-family homes over the same period were off 6%, to 15,642 homes from 16,704 a year ago. NORMLS covers Ashtabula, Cuyahoga, Geauga, Lake, Lorain and Medina counties.