$1 million and rising

NW GUILFORD – For R&K Custom Homes’ Kathy Dumas, the math is simple enough. As the costs for building a new house reach $275 a square foot, the price of a 3,500-square-foot home approaches $1 million.

And “that’s without any upgrades or additions,” Dumas said.

Like other builders in northwestern Guilford County, Dumas and her husband, Rich, are coming to terms with the post-pandemic reality of homebuilding. So are buyers who, despite seven-figure price tags, are snapping up new homes in subdivisions such as Oak Ridge’s Pemberley Estates.

“Most of my buyers right now are paying cash,” said Matt Walraven, owner of Walraven Signature Homes. He’s got more than 20 houses in some stage of design and construction, most in the northwestern area of the county.

Walraven said he’s building on three lots in Pemberley Estates, a subdivision under development on N.C. 150 in Oak Ridge. A “presale” house he’s building for a customer is going for more than $1 million while a speculative – or “spec” – house he’s constructing will sell for around $900,000, he said.

“We don’t have any inventory,” said Walraven, echoing the view among builders that the combination of tight housing supply and rising building and land costs are driving prices higher.

climbing in northwest Guilford in the second quarter, rising 5.2% – from $634,474 to $667,399 – in Oak Ridge and Summerfield from a year earlier, according to the Greensboro Regional Realtors Association (GRRA). In Stokesdale, average prices jumped 12.1%, from $425,997 to $477,582, over the same period.

In the quarter, new listings sank, decreasing from 141 to 95 in Oak Ridge and Summerfield and from 99 to 42 in Stokesdale, according to the association, citing Triad Multiple Listing Service data.

Competition for housing slipped in the three months through June, judging by the percent of list prices received by sellers. In Oak Ridge and Summerfield, the percent declined from 102.8% to 100.3% a year earlier, while dropping from 102.5% to 99% in Stokesdale.

Nationally, the low inventory of housing is “keeping demand solid for new homes,” helping boost builder confidence in July “even as the industry continues to grapple with rising mortgage rates, elevated construction costs and limited lot availability,” the National Association of Homebuilders reported in a statement last month. It was the seventh straight month of rising confidence among builders.

Building lots in northwest Guilford are selling for $125,000 to $150,000, up from around $100,000 before the start of the pandemic in early 2020, according to Walraven.

U.S. dollars.

On average, home prices kept

“Materials costs are still extremely high,” Dumas said in an email last month. “While (prices for) building lumber dropped after COVID, everything else that goes into the building continued to increase – plumbing, HVAC, concrete, brick, stone, appliances, tile, etc.”

As a result of higher costs for land and materials, she said, the cost for houses built by R&K have climbed

This

Estates subdivision off N.C. 150 northwest Guilford County say the post-pandemic reality is that new custom-built home prices are easily approaching the $1 million range, but that’s not enough to deter buyers. from around $275 a square foot, up from about $220 a square foot before the pandemic. That increase pushes the starting price for houses to about $960,000 in communities that require a minimum of 3,500 square feet in new construction, according to Dumas.

Even as demand for housing has slowed from last year’s “white-hot market,” it’s “still very, very strong,” confirmed Ray Bullins, owner of Ray Bullins Construction.

Despite rising costs, Bullins said he’s making “a concerted effort” to build houses in the $700,000 to $850,000 range because of limited competition in that price range.

“There’s a niche right there that’s hard to find,” he said. To keep prices below $1 million, he said he seeks lots that cost less than $150,000 and builds houses with 3,000 square feet or less.

Bullins added that “the phone’s ringing off the hook” from homeowners wanting to renovate their homes, partly due to the cost of new houses.

He’s preparing to renovate a Summerfield home at a cost of $250,000 to $300,000 because the owners “want to stay in the area, but they don’t want to spend $1 million on a new house,” he said.

Rising interest rates are also prompting some homeowners to stay put and renovate instead of buying new houses, according to Bullins.

Nationally, mortgage rates rose for most of 2022 and are now more than double what they were two years ago.

Fannie Mae, a government-based mortgage financing company, forecasts that the 30-year fixed-rate mortgage rate will increase to 6.6% in 2023, up from an annual average of 5.3% last year, before declining in 2024.

Falling rates may encourage more buyers to enter the market, putting even more pressure on the tight housing supply.

“An extremely limited number of existing homes available for sale continues to be the defining feature of today’s housing market,” Doug Duncan, Fannie Mae’s chief economist, said in a statement last month. “The ongoing lack of inventory… has resulted in significantly stronger home price appreciation than previously anticipated.”

For northwest Guilford builders, the lack of supply often means they’ve sold their homes before they’re finished – or even before construction starts.

“We’re moving inventory quickly,” said Casey Johnson, who owns CJ Builders with his father, Commie. Prices for the seven custom and spec houses they’re building in Stokesdale range from $750,000 in the North Ridge subdivision to $275,000 on a single lot on Belews Creek Road.

The least-expensive house will have about 1,200 square feet, keeping it in line with other homes in that area of Belews Creek Road, according to Johnson. In neighborhoods such as North Ridge with building costs of around $235 to $245 a square foot, building houses with around 3,200 square feet keeps their prices well below $1 million, Johnson said.

Few prospective buyers of houses approaching $1 million are complaining about prices, according to builders. Some aren’t deterred by higher interest rates, either.

“In the million-plus price range, the interest rate has not yet had much of an impact,” Dumas said. “Many purchasing in this range are either doing very well in business or are older and have already seen rates as high as 18% plus, so 8% doesn’t scare them.”

“Some say it’s really expensive (to build) out here,” Johnson added. “Those are the guys who are missing the sale.”

He noted the northwestern Guilford market is “very shielded compared to some other markets nationally.”

“So many people are moving here,” Johnson said. He explained that he’s begun meeting with prospective homeowners who are relocating to the area to work for Boom Supersonic, which is planning to employ more than 2,400 people in its operations at Piedmont Triad International Airport.

New faces – and an interior/exterior facelift

by ANNETTE JOYCE

Forbis and Dick Stokesdale Chapel has been undergoing a transformation since Keith Fesperman assumed the role of manager/funeral director in April. He succeeded Todd Harmon, who continues to work with Forbis and Dick in pre-planning.

Fesperman has been with Forbis and Dick for almost 19 of his 33 years in the funeral services industry.

“I started working with my hometown funeral home in Salisbury right after high school,” Fesperman said. “It’s nice to be in Stokesdale, which is a small town like where I grew up. People here are sincere and I get more of a sense of working with families.”

Since moving to the Stokesdale Chapel this past spring, Fesperman has been focused on enhancing the services it offers as well as the facility’s appearance.

“We’ve changed everything but the staff,” he said, noting the longevity of several staff members.

Office manager Kathy Gray and funeral home assistant David McCormick have been with Forbis and Dick for 22 years and are well-known in the community. Jim Clark is another familiar face, while Pamela Hayes is the newest team member.

Under Fesperman’s oversight, Forbis and Dick Stokesdale Chapel continues to undergo some major updates. Most noticeable is the conversion of the multipurpose room into a stand-alone chapel, as well as benches being replaced with comfortable padded chairs.

The entire interior of the facility has been given a fresh coat of paint and new carpet. Contemporary furniture has been added to the mix of antiques to give a fresh, inviting look. And something as simple as opening the exterior doors has provided a softer, lighter atmosphere.

On the outside, Stokesdale Chapel is also undergoing updates, including a new roof and landscaping, removal of iron accents and the addition of a more user-friendly wheelchair ramp.

“We’re still working on the outside, with more changes to come,” Fesperman noted.

Fesperman has also added a larger selection of items specifically designed for veterans; the funeral home also offers a discount for veterans.

Since taking over as funeral director, Fesperman has enjoyed getting to know the community and said he already feels at home in his new role.

Fesperman and his wife, Kelly, live in Thomasville. The couple’s 17-yearold daughter, Daisy, is a rising senior at Hayworth Christian School in High Point.