Stamford”™s Palmer Hill development is more bustling today with trucks and tradesmen than it has been in the past two years.
“We are at 24 deals this year; over three at this time last year,” said Bill McGuinness, partner at Palmer Hill Partners.
The development will have 195 homes, including townhomes as well as three condominium buildings on 20 acres of land on the border of Stamford and Greenwich.
“We are at about 93 deals of the total 195 homes,” he said. “Right now we are specing homes and people are buying. We are in; we need to build until we”™re done.”
Palmer Hill is a barometer of the market because it increases or decreases its home production as the units sell. The project is a partnership among Buckingham Partners of Haddonfield, N.J., Sun Homes of Pawling, N.Y. and New York City-based O”™Connor Capital Partners.
“We are constantly building homes,” McGuinness said. “We have found the best approach is to build homes, have inventory to offer and be able to close within 60 to 90 days.”
The project is just finishing its second of the three condos buildings. The third will start construction in two months.
“Long gone are the days when you wait ten months for a project to be built,” said Terence Beaty, director of new homes and land division for Prudential Connecticut Realty. “You have to build a couple builds ahead of your sales. And in this market I think doubling down on that is appropriate. After a bad couple of years we”™re seeing the market come around particularly in Fairfield County.”
In August, McGuinness said he saw a distinct increase in home buyers coming to the market and many of those interested in the finished style of homes of Palmer Hill were younger.
“That strong young demographic has surprised us,” he said. “There”™s a growing interest in maintenance-free living with younger buyers.”
The empty-nester demographic, for which Palmer Hill had planned to designate two thirds of its development, are generally tethered to homes which they need to sell before they can approach the market.
“There is really a future in tailored home products gauged toward younger buyers,” Beaty said. “That”™s especially true in Fairfield County.”
Palmer Hill townhomes range in size from 2,000 to 4,000 square feet and are currently priced from the low $600,000s to more than $1 million.
“The dream of the single-family house for young couples isn”™t the overriding desire today,” McGuinness said.
“Young buyers want it to be what they are looking for off the bat,” Beaty said.
McGuinness said for couples commuting to New York City, a clubhouse, swimming pool and zero external maintenance on brand new construction is a major plus over moving into an older home.
“It definitely relates to the instant gratification generation,” said McGuinness. “But what it really comes down to is they are more able to buy.”
According to the first quarter report for Prudential Connecticut Realty, in Fairfield County the average luxury home price dropped by approximately 5 percent due to weakness in the $5 million segment of the marketplace. The report found that in the last month increased buyer activity has been cited with more homes going to contract.
McGuinness said as the Greenwich resale market recovers, Palmer Hill expects to see more empty-nesters entering the market.
Beaty said the exodus of homeowners through the 1990s and early 2000s, where homeowners realized profits for moving farther into rural areas, are reversing.
“People are definitely coming back in,” Beaty said. He said that reversal means that when the empty-nesters do begin to sell their homes, there will be immediate demand in closer suburban areas, especially in Fairfield County.
“There is a direct correlation between happiness and length of a commute; and people are realizing that,” McGuinness said.
Though buyers are returning, they are much more skeptical about approaching new developments.
“If you”™re showing a home it better be a well-finished product,” Beaty said. The majority of homebuyers who have been in the market for the last two years have come across at least one project in which they would want to live, he said, but the project was incomplete or failed.
McGuinness said that while his business is up, the real estate market has created a lingering negative perception overall. He said many new homeowners are skeptical.
“People come in and ask, ”˜Are they real or not?”™” said McGuinness. “Some projects have gone rental and others are never quite finished. It”™s a very tough lending environment and as a buyer you can become very jaded. It takes a lot more to convince people that we are financially capable of delivering on what we have billed. I don”™t blame them.”
Establishing a strong base of sales and gaining the confidence of mortgage providers is instrumental in a large residential project success in the current market.
“We have 73 families living on site and have really become an oasis of some normalcy in the market where there are still really difficult times out there,” he said.
The Palmer Hill development is planned to finish building in spring 2013.
The partnership that makes up Palmer Hill will next move on to a project in Darien.
“In Darien we are closing on the land this summer,” McGuinness said. “We will then begin site work and probably bring it to market sometime in 2012.”
