New-home market makes gains

"We look for sites that fit the product to the demographic," says area president Anthony E. Maras of K. Hovnanian Homes.
"We look for sites that fit the product to the demographic," says area president Anthony E. Maras of K. Hovnanian Homes. (ED HILLE / Staff Photographer)
Posted: March 24, 2014

Government reports about the residential-construction industry suggest the new-home market is recovering quite well.

Anthony E. Maras readily agrees and, as K. Hovnanian Homes' area president for Pennsylvania and South Jersey, he has the numbers to prove it.

Since taking his post at K. Hovnanian in June after eight years with Heritage Building Group, first as general counsel, then as president of the home-building side, Maras says he's "been growing Pennsylvania" and the cultivation is bearing much fruit for the Edison, N.J.-based national company.

"There are huge opportunities in Pennsylvania," he said, "and we are targeting sites in good areas."

That is, those convenient to commuter routes, with good schools. Key word: location.

"We look for sites that fit the product to the demographic," especially in areas where there isn't much product to begin with, he said.

One example: Whispering Pines, K. Hovnanian's 78-townhouse community in Warminster, which recently sold out after just three years.

Another: Big Oak Crossing in Langhorne, offering 143 2,200-square-foot, three-story townhouses with two-car garages, at prices starting at $340,000. Since November, when sales began from a trailer, K. Hovnanian has sold 24 units - model homes weren't even open until January, and the winter was the coldest and snowiest in years.

What's more, Maras said, "a lot of customers are putting $30,000 to $40,000 in options into the townhouses," which pushes up the final sale price.

A sales pace of seven units per month has justified the company's faith in building in Bucks County, he said.

Maras noted that Whispering Pines in Warminster had a "fair number of trade-down buyers."

But because Big Oak offers two distinct floor plans, the community is drawing a "mix of first-time, move-up and move-down buyers, with and without children," he said. One plan has a modern, urban feel, drawing people moving from apartments, he said; the other is more traditional, and so is attracting an entirely different demographic.

Commuting distance to New York and Philadelphia and the quality of schools - in the case of Big Oak, the highly rated Neshaminy district - are always factors in the location equation.

"The Trenton station is just 15 minutes away, and the Woodbourne [stop on SEPTA's West Trenton line] is three miles," Maras said of Big Oak.

Location also means access to what Maras called "daily resources" and "the things we do in daily life."

"How easy it is to get to shopping or the kids to school plays a big role in buying decisions," he said.

Maras jokingly described the road to his current position as "tortured," starting out as a lawyer, then focusing, beginning in 1993, on developers' land-use issues.

He joined Riley Riper Hollin & Colagreco in Exton in 2001, then went to work as general counsel for Heritage Building in 2005.

One of the biggest challenges Maras deals with is the lengthy process involved in getting land through government-approval processes, which can take four to six years from the time the property is purchased.

Another is improving the land, which, many builders say, can cost anywhere from $35,000 to $100,000 a lot over and above the actual purchase price of the property.

Since the success of any project can depend on timing, Maras and K. Hovnanian are searching for "raw approved and improved land" to build on.

The Langhorne site it purchased from a commercial developer for Big Oaks already had gone through the residential approval process, so K. Hovnanian could begin sales as demand was rising.

Otherwise, Maras said, developers face a protracted process that can be a bar to quick market entry:

"Some developers get all the approvals and then don't build, and the rules change in the meantime, and they can't get started when they are able."

Others let approvals expire, he said, and when they are finally ready to build, "they have to start the process over again."

215-854-2472 @alheavens

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