Recent sales build optimism at Gerstad Builders
Article from the Northwest Herald:
McHENRY – Optimism reigns at Gerstad Builders today.
“We are being optimistic for 2011,” sales manager Linda Conkel said. “We have completed the paperwork and are ready to begin building two inventory homes at two of our subdivisions. We built no inventory homes in 2010.
“And we must be really optimistic as we are even getting ready to open a brand-new community.”
The optimism stems from a new sales program for 2011 and pent-up buyer demand.
“For 2011, we are offering 11 percent off the price of a new home, which is not an insignificant sum. Let’s say a buyer wants a single-family home that is priced at $200,000. That means $22,000 comes off the base price of that home,” Conkel said.
In 2010, Gerstad Builders sold two lots and seven semi-custom, single-family homes. Cash, not credit or a mortgage, was the primary mode of payment.
“Out of the last seven houses we sold, six were for cash,” Conkel noted. “These are the people between 60 and 80 years of age who want to downsize but have waited for the housing market to break, but it did not. They owned a home and, due to market conditions the past two years, were not able to sell their old home. They wanted to sell it at their price and downsize into one of our maintenance-free ranch homes.
“They could not sell at their original price, but they made the move anyway. They had lived in their old home 20 years and were ready to sell and be closer to children or grandchildren. And they wanted to escape from doing any more upkeep on that older home, so they accepted a lesser price, sold their home and moved into one of ours.
“These buyers are probably selling a $500,000 to $600,000 home. After selling the home and paying for a new one from us with cash, they are ending up with $250,000 to $350,000 for their own personal use.”
The builder’s active subdivisions are Liberty Trails in McHenry, Trails of Pheasant Ridge in Richmond, Bailey Estates in Williams Bay, Wis., and Trails of Dawson Creek in Poplar Grove. All are within an hour’s drive or less of the company’s corporate office at 1600 Reagan Blvd.
“Basically, all our homes are the same but differ in price according to the location. Our basic ranch is a two-bedroom, two-bath, 1,700-square-foot home with a two-car garage and basement on a quarter-acre site. At Dawson Creek in Poplar Grove that house price would start in the high $160,000s. In Pheasant Ridge in Richmond it would be in the high $180,000s. At Liberty Rails in McHenry, it would be $190,990, and at Bailey Estates in Williams Bay it would be $225,990,” Conkel said.
“The price difference indicates codes and minimums. At Williams Bay, for example, the minimum lot size is a half-acre and not a quarter-acre. Also, Wisconsin’s building codes are different from Illinois, which adds to the price of a home. Those codes and the enforcement of them are moving south so Illinois is getting them, too. Here in Illinois, the price variation indicates what we had to pay for the land, improvements and overall market conditions.
“Keep in mind that our 11-percent-off program means all the home prices listed above will cost the buyer 11 percent less.”
Customizing any plan is a given with Gerstad Builders. “We will customize homes per buyer requests. Interior or exterior walls can be moved. Windows can be added, enlarged or decreased. It doesn’t make any difference what the request is, we are willing to do it,” Conkel said. “We’ve been building homes a long time and we know how to customize without adding too much to the price of a home.”
Options in Gerstad homes include skylights, three-car garages, wood-burning fireplace, additional volume ceilings, custom millwork, imported ceramic tile, Corian or granite counter tops, hardwood flooring, and English or walkout basements.
Gerstad offers two-story and ranch semi-custom plans, but in today’s market, especially with empty-nesters downsizing, the emphasis is on ranches. Empty-nesters may be today’s target market, but anyone is welcome to buy a Gerstad home.
Two of the new ranch plans are the Biltmore and Prestwick.
“The Biltmore floor plan, like the Prestwick, is designed for people looking for a home with no stairs to climb,” Conkel said. The 1,292 square feet of living space includes vaulted ceilings, two bedrooms, two baths and an attached two-car garage.
Inside is a 16-foot, 6-inch by 11-foot, 11-inch kitchen and breakfast area, 14-foot by 20-foot, 4-inch great room, study (or third bedroom), laundry, 13-foot, 6-inch by 14-foot, 2-inch master suite and a second 11-foot by 11-foot, 3-inch bedroom. Dual bi-fold door closets and full bathrooms serve the two bedrooms, which share the same side of the ranch.
“Our new homes represent more than the introduction of a group of new floor plans. They represent Gerstad Builder’s continuing effort to refine homes to meet our customers ever changing desires,” company president Roger Gerstad said in a 2010 interview. “Based on buyer feedback, and changing buying habits, it became apparent there was sufficient demand for smaller square footage homes with lower purchase prices.”
A basement is an $11,000 option with the Biltmore.
“The Biltmore is spacious enough to host family events, yet efficient enough to easily heat or cool throughout the year,” Gerstad added.
“So many of our buyers, especially at Liberty Trails, come from Lake County. Taxes and living expenses are less in this area,” Conkel said.
“The Prestwick is another ranch and it will be built everywhere except Bailey Estates. It has two bedrooms, den, two-car garage, master bedroom suite with a walk-in closet, two baths, great room and dining room combo, kitchen and 1,567 square feet of living space,” she added.
Construction on these two ranches will begin shortly. A Biltmore model will be built at Dawson Creek and the Prestwick in Liberty Trails. They should be ready for public viewing access by the end of June.
“And we hope to break ground this spring on our new community, the Villas of Countryside Estates, in Poplar Grove,” Conkel said. “These are basically two-bedroom, two-bath duplexes with prices from the $130,000s to the $150,000s. They are for those who do not want to go into assisted living, and want to stay in their own home without the maintenance or the stairs.
“We have room to build 70 units in 35 buildings. We will begin slowly, one building at a time. If it takes off, we will try the concept elsewhere, in some other city. It could really take off. We are optimistic about this project since the duplexes are in a good price range.”
Gerstad communities are open weekends or by appointment. Liberty Trails, though, is staffed seven days a week.
Since the company was founded in the 1960s, Gerstad has built and sold more than 9,000 single- and multi-family homes, most of them in McHenry or adjoining counties.