Developer to open access to builders

• By GARY PERILLOUX
• Advocate business writer
• Published: Mar 19, 2008 - Page: 1D - UPDATED: 12:05 a.m.

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The developer planning a 271-lot residential subdivision near Denham Springs will widen access to local homebuilders and increase options for homeowners, in part because housing demand in greater Baton Rouge isn’t as brisk as the months following Hurricane Katrina.

Spatz Homes, a Washington, D.C.-based affiliate of Spatz Development in Chicago, is building the 103-acre Crystal Lakes subdivision near Eastside Elementary and across from North Park at Burgess and Lockhart roads.

“I think we’re sort of back to where we were pre-Katrina, maybe a bit before that period,” said Bryan Spatz, president of Spatz Homes. “We see somewhat steady, if not spectacular, growth. And I think that’s going to continue for the foreseeable future.”

Spatz Homes will begin selling lots March 28 for Crystal Lakes and soon will announce six preferred builders for the development, where lots with 50-foot frontage will sell for $29,900 and lots with 75-foot frontage will sell for $55,000. But the company has increased flexibility for buyers, saying prospective homeowners can bring in their own builder and construct a completely customized house within neighborhood covenants — or choose off-the-shelf stock plans and designated builders offered by Spatz.

The moves are atypical for national homebuilders who hit the Baton Rouge market after Katrina, when Baton Rouge’s housing stock shrank and construction of new houses soared. National builders, such as D.R. Horton and KB Home, entered the market after the 2005 hurricane offering amenity options, but doing so within a tightly controlled, turnkey construction process using pre-established floorplans. Horton has about a dozen area subdivisions; KB Home recently said it’s leaving the market after completing several subdivisions under way.

Spatz said his company has about 30 plans available for building that will begin in August, but “we’re not being dictatorial,” he said. “The buyer does not have to fit into the developer’s mandate — we’re bending to accommodate potentially 271 individual approaches.”

Joe Didier of Maurepas-based Didier Home Builders agreed the area homebuilding market has cooled off from 2006, but remains stronger than pre-Katrina, he said.

“What’s happening in Crystal Lakes is it’s not exploding like they thought it would immediately after Katrina,” said Didier, also the president of the nine-parish Capital Region Builders Association. “But it will sell. It’s a good location, it’s a good school district, it’s a good parish. Yes, there are some areas we are having problems with inventories, but overall for the nine-parish area we project 19 percent above pre-Katrina sales (for 2008 compared to 2004). That’s pretty good.”

Data from the Greater Baton Rouge Association of Realtors showed sales of houses in the region fell 14 percent in 2007 compared to 2006. But the nearly 10,000 houses sold represented an 8 percent gain over 2004.

Didier said subprime lending — loans to buyers with poor credit histories — was much less common in Baton Rouge than other parts of the nation, and economic and population growth on the I-10/I-12 corridor projects stronger than most of the country.

The National Association of Home Builders — which projected the 19 percent growth rate for Baton Rouge versus 2004 — lists only Louisiana and New Jersey as net growth states for housing in 2008, Didier said.

“To some extent, Baton Rouge has bucked the trend of what’s been going on nationally,” Spatz said. “It’s a little bit difficult with this credit crunch that’s going on to predict into the future how it’s going to turn out, but I think the fundamentals for Baton Rouge are strong and that Baton Rouge will continue to be a growth market.”

Spatz Homes originally planned to build Crystal Lakes with a single designated homebuilder, but negotiations weren’t successful, Bryan Spatz said. With the arrival of a somewhat softer market, the company decided to make options much more flexible to prospective homebuyers.