How's a Tampa Bay home builder supposed to snag buyers after suffering through the worst year for housing sales in decades? • How about free turkey sandwiches, $10,000 vouchers, narrower lots, $99,000 specials and — gulp — the return of vinyl flooring? • After a year in which Tampa Bay builders poured slabs for only 3,500 homes — an 83 percent plunge in 4 years — the industry has settled on a combination of slashing and streamlining and the siren's song of incentives.
A pioneer in the downsizing movement, Pat Neal, president of Bradenton's Neal Communities, has introduced a new "cottage series" to rave buyer reviews.
Lower-priced, boxier and standing only 7 feet apart, the cottages are Neal's idea of urban space conservation in a suburban setting. Starting at $124,000 and 947 square feet, they also sell for a whole lot less. Neal said he's back to charging what he did in 1989.
"We've been in a downturn for five years and finally we're making about one sale a day," said Neal, who markets the cottages mostly in his Forest Creek and River Sound subdivisions on each side of Interstate 75. "These homes are smaller, more square, they're built with concrete block and stucco without additional adornment."
He shifted to cheaper door locks, offers fewer choices of cabinets, windows and countertops, and replaced tile with carpet. He's even reintroduced vinyl floors, largely banned from the builder toolkit during the housing boom.
"They've been de-accessorized," Neal said.
Mortgage rates are at historic lows, but M/I Homes hopes to do the market one better. It's marketed sub-4-percent financing for some Tampa Bay buyers and thousands of dollars in new home upgrades for every renter who produces a lease agreement.
Taylor Morrison Homes mothballed a couple of unproductive communities and slashed prices to $99,000 for 1,268-square-foot, single-family homes in southeast Hillsborough County's College Chase neighborhood.
Beazer Homes is offering free washers, dryers and refrigerators in some of its communities, including Pinellas County's Sawgrass Village and Pasco County's Dupree Lakes. Even so, there aren't as many big-ticket and luxury items like pools thrown in as freebies these days, said Beazer sales manager Kareyann Rhodes said.
"Everybody's readjusting prices and standard features to bring houses back to today's affordability," Rhodes said.
Some builders have discovered the limits of the downsizing offensive.
Beazer test-marketed an 1,100-square-foot home last year in Dupree Lakes before realizing buyers hankered for homes larger than 1,500 square feet.
KB Home made a splash two years ago with the introduction of an apartment-sized two-bedroom house, a throwback to low-cost 1970s retiree boxes. Weak demand largely ended the experiment.
KB has shied from incentives, but drew 85 prospective customers this month to an instructional home-buying seminar in Riverview's Moss Landing neighborhood. Baiting the hook further, the builder supplied a free lunch of sandwiches.
How are the new builder enticements working? It's probably too soon to tell.
According to Tony Polito, a consultant to Tampa Bay builders, sales will probably rise about 15 percent this year over 2009. The best hope for a solid turnaround is 2011. But Polito has been pushing back his recovery dates for a couple of years.
New-home prices in Tampa Bay have fallen by about a third since the 2006 peak, forced lower by a glut of never-lived-in new construction and barely lived-in foreclosures.
Typical of the hard-driving home buyer is Larry Hoffman, a middle-aged New Yorker who wants to relocate to Tampa Bay.
He has more or less settled on a $208,000, 2,600-square-foot home offered by Home Dynamics in Pasco's Lakeshore Ranch community.
But he's expecting a little more sacrifice from the builder, which has already offered to pay closing costs and donate $10,000 toward upgrades.
"I figure I'll start with a lower price and see if they'll negotiate," Hoffman said. "I hope it helps that I want to pay 50 percent cash."
Neal, successfully selling the public on the notion that smaller is better, is relieved by one change in the market: Buyers have stopped treating home purchases as if they were chasing a hot stock tip.
"Housing is basically a consumer good. As we like to say in my business, 'Sell to emotion and justify with fact,' " Neal said. "It's like buying a ring or a new car. It's not like buying a stock or bond. We lost sight of that."