May 25, 2012

KGA maneuvers through industry reset

LOUISVILLE — It’s a new world in the home designing, building and buying world, according to Jerry Gloss, KGA Studio Architects’ senior partner.

“Everything has gone through a reset,” he said. “What we thought was the norm has now been reconsidered.”

Value engineering — making sure that each dollar spent on a new home is spent wisely — is currently taking the lead in importance.

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“Salespeople were just order takers in 2000 — anything built was sold,” Gloss said. “Now they have to deal with questions about validating what’s unique.

“Buyers want stand-up information and to know about what’s being put into homes that will help them hold their value.”

The lot, location and insulation for energy efficiency create a home’s basic value in the eyes of those buyers.

Gloss sees the housing market as being driven by two groups: Baby boomers, 1946-1964, and Generation Y, those born in the mid-1980s. One group wants to downsize while the other is spreading out.

KGA recently received top recognition for design excellence of the PURE by Infinity Homes’ Collection at Stapleton. The homes cater to the younger group who are jumping at the opportunity to live there.

Forty of the $600,000 and up houses have sold since July.

“The magic was in knowing the demographics — who’s buying and what they want,” Gloss said.

The PURE homes include wide-open living areas for entertaining and multitasking as well as iPad controls to regulate the environment. Oversized garages are designed to hold all the gear Gen Yers need to store.

The houses also are designed to be turned solar if buyers chose the option in the present or future.

“These houses are meant to endure. I don’t think they will depreciate that quickly,” Gloss said. “Instead of flipping them every five years, these families will probably stay there from kindergarten through cap and gown.”

He pointed out that the Gen Yers tend to be the ones who can qualify for loans to purchase homes like these.

“They’re growing families, and 1,500- to 2,000-square-foot homes are not enough for them. They want something more robust.”

Average builder members of the National Association of Home Builders reported building homes in the 2,300-square-foot range. In 2011, that number jumped to 2,500 square feet.

Value is playing more into the equation as well as size over the search for something cheaper.

“Things like value fell by the wayside, but now that and value engineering are propelling the market.

“This group is generally upwardly mobile, and Stapleton is a hip and happening place.”

According to the U.S. Census Bureau, there are 77.4 million Gen Yers, and 75.6 million baby boomers. And for as much as Gen Yers are looking to spread out, Baby boomers are looking to pare down – creating an opposite trend in the housing market.

“Baby boomers are retiring and resetting their goals,” Gloss said. “They understand that they’ll be working longer, and they want more energy efficient and smaller homes.”

Developments like Steel Ranch in Louisville, another project KGA has received awards for, cater to that 50-plus market.

“Sales rates are unprecedented,” Gloss said. “Baby boomers have been quiet for the last four or five years like they disappeared, but it’s not so anymore.”

Homes in 50-plus developments like Steel Ranch focus on features like more lighting and less stairs.

Accessible bathrooms and studios on main floors that could be turned into master bedrooms meet baby boomers’ wishes to stay in the homes for a long time.

Steel Ranch homes include storage and space for the unexpected — like boomerang kids, according to Gloss.

Another trend he sees in the housing industry is the interest in newer homes. Although there was a period of two years to three years early on in the recession when foreclosed houses had appeal, things have changed.

“If they’re still around, they’re dogs,” he said. “Whereas in 2008 and 2009 anyone could have anything old, people now want to be excited.

“We also had code changes in about 2008 to create more energy efficient plans, so the real estate community will start looking less at houses built before then.”

In general, the revised codes require higher levels of insulation and higher performance for everything included inside.

“At the end of the day, homes built today are more efficient than four years ago, and that will mean saving some money, too,” Gloss said.

“For the past four or five years people have been watching the changes, wondering if interest rates will stay low,” he added, “and I think we’ve finally reached the bottom.

“If we had a bull-blown economy we’d be building like crazy.”

Gloss refers to the economic recovery as slow but starting. With 35 years in business, KGA has survived a few downturns and continues to focus on creating new thoughts in the housing industry.

“I tell my staff that over the years our projects may have been fewer, but we’ve gotten more awards.”

LOUISVILLE — It’s a new world in the home designing, building and buying world, according to Jerry Gloss, KGA Studio Architects’ senior partner.

“Everything has gone through a reset,” he said. “What we thought was the norm has now been reconsidered.”

Value engineering — making sure that each dollar spent on a new home is spent wisely — is currently taking the lead in importance.

“Salespeople were just order takers in 2000 — anything built was sold,” Gloss said. “Now they have to deal with questions about validating what’s unique.

“Buyers want stand-up information and to know about what’s being put into homes that…

Christopher Wood
Christopher Wood is editor and publisher of BizWest, a regional business journal covering Boulder, Broomfield, Larimer and Weld counties. Wood co-founded the Northern Colorado Business Report in 1995 and served as publisher of the Boulder County Business Report until the two publications were merged to form BizWest in 2014. From 1990 to 1995, Wood served as reporter and managing editor of the Denver Business Journal. He is a Marine Corps veteran and a graduate of the University of Colorado Boulder. He has won numerous awards from the Colorado Press Association, Society of Professional Journalists and the Alliance of Area Business Publishers.
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