Local builders say lot prices hurt affordability

By Jenna DeWitt: CNJ staff writer

Local builders say lot prices, material costs and taxes are some of the reasons their homes have to sell at prices higher than Cannon Air Force officials say new personnel can afford.

Col. Steven Kimball say the typical military family considers a price range of $100,000 to $150,000 affordable housing.

Permits pulled for new home construction in Clovis during December 2009, however, ranged from $166,434 to $508,664 with most around $200,000. Builders in Clovis and Portales say that while those values are higher than military buyers expect, it is often the lowest price homes can be built here and still enable them to make a profit.

Carlton Casey, owner of Insulating Enterprise, said lot costs are a major factor in his prices.

“Lots are too high, you just can’t build a house that cheap,” Casey said.

It is a sentiment echoed by other builders.

“I would love to build at that price range, but I can’t do it profitably,” said Craig Chapman, owner of Chapman Construction. “Our lot and material costs are too high.

“Say cost is around $100 a foot,” said Chapman. “Then you have interest to pay, real estate fees, title fees and tax to the state.”

Chapman said his homes range from $190,000 to $230,000.

“We try to put out a quality product and not cut corners. In order to get it down, we would have to cut corners are we aren’t willing to do that,” Chapman said.

Jody McDonald, another local builder, agreed, saying durability and rising production costs are at odds when considering which materials to use.

“Most everybody wants a brick home. Most of the other stuff that will last is as expensive as brick,” he said. “With the lot prices being around $30,000… you can’t build something for what (price) they will buy and think it will last.”

McDonald said location is what counts in Clovis.

“They tell the military not to buy on the west side of Main Street, but that’s the only place you can build on lots that cheap. Many builders are getting them vandalized, plus the military says not to buy in that area.”

Builders said distance from major cities also causes higher prices . They said developers in larger cities can afford to build hundreds of homes at a time and conduct national searches for less costly materials.

“We try to buy locally and the local people get the best price they can get. They’ve got to make a living on building only so many homes per year. That’s the reason homes are higher here. We have to get our materials shipped in. We are out in the middle of nowhere,” McDonald said.

Chapman said because military buyers are more likely to resell their homes, the quality of the house is important.

“If you make an investment, and a home is the largest investment most people have, you want to be able to resell for what you gave for it. That’s why it is important to build quality homes,” he said. “The resale value of their home should be very important to them.”

Nearly every builder said they are selling all the homes they build, as the base’s growth affects many other aspects of Clovis and Portales business success.

Bob Linn, owner of Linn Homes, Inc., said square footage affects the price value on his homes, which range from $130,000 to $220,000. Linn said his buyers are mainly military and he has not had trouble selling homes.

“In the past three years I have doubled (sales) each year. We try to grow with (the base),” he said.

Despite the conflict in military expectations and actual home prices, Chapman said he believes the base’s growth is the reason the Clovis and Portales area economy hasn’t been as severely affected by the recession as many other parts of the country.

“We are very fortunate to have them (Cannon). Anywhere else we wouldn’t even be building.”