In our antsy world, it’s not much of a surprise that people who want a custom house can find something close to it ready-made.
Mary and George Sperzel, for example, move about every two years because of job transfers. Most recently, the couple and their three children moved to Lake Forest from Cincinnati.
They knew they wanted a new house with all the latest amenities, but they didn’t have time to wait for one to be built.
“The lead time to build a custom home is way too long when you have to move quickly,” said Mary Sperzel.
So they bought a 4,000-square-foot house that was almost finished. All Mary Sperzel had to do was select paint colors for the walls and granite for the kitchen countertops. The other special touches common in a custom house had already been selected by the builder.
This was the Sperzels’ fifth purchase of a custom-like home that was either finished or nearly complete.
“We’ve always been able to buy a house in one weekend. It’s like we have a lucky star,” Mary Sperzel said.
Lucky too are the other buyers who want a custom house, but who don’t want to wait for it to be built.
There’s a healthy supply of newly finished expensive houses for sale nowadays, thanks to a slow market for homes that cost $1 million or more.
Also fortunate are the buyers who can afford a ready-to-go house with first-rate finishes and frills such as crown moldings, cherry wood floors, a home theater and a gourmet kitchen with multiple dishwashers and ovens.
Builders pack everything into these pre-made custom homes in order to please high-end buyers.
“We know what our client is looking for,” said Evan Harris, president at Harris Builders LLC, Barrington. Harris has two expensive custom-type houses ready and two others under way.
“Our houses include everything,” he said.
Building an expensive house without having a buyer lined up is nothing new. Builders have always constructed a certain number of these so-called “spec” houses.
“Spec” is short for “speculative” because the builder takes a risk, pouring a lot of money into a house that hasn’t been sold.
But the market for expensive spec houses is rather limited, according to Gopal Ahluwalia, vice president of research at the National Association of Home Builders in Washington, D.C.
He said only one-half of one percent of new houses sell for $1 million or more. In the Chicago area, the price for a luxury spec home starts at about $1 million.
“These houses tend to appeal to buyers who don’t have the time to build a custom house, or who don’t want to hassle with the (building) process,” Ahluwalia added.
Mike and Maria Jackson tried to build a custom home, but they got fed up with all the red tape involved.
They bought land in Barrington Hills and spent more than a year working with designers and architects to get everything they wanted in the house. But the process didn’t stop there.
“It took seven months to get a building permit,” said Mike Jackson. “The building permit process was a joke. I got so frustrated that I walked away from the whole thing.”
As an alternative, the Jacksons bought a spec house that was almost finished in northwest suburban Inverness. The 7,400-square-foot house has six bedrooms and seven bathrooms–plenty of room for their family of four.
The house, which cost $1.8 million, sits on a lake. But what impressed Mike Jackson the most about the house was that Harris Builders included things he had never considered putting in his own custom design.
For example, Jackson’s spec house has an electric pulley on the chandelier in the front foyer. A switch in a nearby closet lowers the light so it can be cleaned or the bulbs can be changed.
“They thought of everything,” said Jackson. “We got our custom house without all the frustrations.”
Expensive spec houses can be found in Chicago’s pricey neighborhoods, such as Lincoln Park, as well as in exclusive suburbs.
Many of the suburban homes are clustered along the North Shore in towns such as Winnetka, Glencoe, Highland Park and Lake Forest.
In many cases, builders buy old houses in desirable neighborhoods and tear them down in order to build a new house on the lot.
“People are looking to eliminate some of the pitfalls of building a custom home,” said Don Zordani, president at Milestone Development LLC, Lake Forest, which has a handful of spec houses under way.
He says it’s hard to find a good lot to build on. This is especially true in established communities where vacant land is scarce, or in places such as Lake Forest where review boards have a big say in how any land is used.
“We are very sensitive to the neighborhood,” said Zordani. “We only build a house that looks like it fits there.”
Milestone is building a spec house in Lake Forest on 2.2 acres near Lake Michigan. The house is a jumbo replica of a historic home in Lake Bluff designed by famed architect David Adler (no relation to the author).
“You must have the design approved by a board and petition the board if you want to change it,” said Zordani.
He prides himself on knowing the ins and outs of the local zoning process with its arcane rules that can be difficult for the ordinary home buyer to fathom.
Locally, prices for expensive spec houses range from about $1 million to as much as $7 million, real estate agents say.
Builders who specialize in these houses typically have a handful of the homes at various stages of completion.
Home buyer Jackson purchased his Inverness house before it was completely finished, so he was able to enlarge the kitchen and make a few minor modifications.
“There weren’t many changes that were needed, in our opinion,” Jackson said.
Of course, builders would prefer to sell spec houses before they’re finished. But because the market for expensive homes has slowed, more spec houses are on the market and for a longer period of time.
“There is a huge inventory of newly constructed houses on the North Shore between Evanston and Lake Forest,” said Sharon Friedman, sales agent at the Winnetka-South office of Coldwell Banker Residential Brokerage. “Buyers have a lot to choose from.”
Right now, there are 134 new North Shore houses on the market priced between $1 million and $2 million, according to Friedman, who gets the numbers from the Multiple Listing Service of Northern Illinois.
But, she said, sales of these homes have slowed. For the 12 months that ended May 15, there were just 14 new homes sold in that price range. The previous year, there were 26 sales.
Currently, the average market time is 106 days for a new house on the North Shore priced between $1 million and $2 million. New houses over $2 million have an average market time of 286 days.
A fat inventory of houses coupled with a lean economy has made buyers pickier than a vegetarian at a Texas barbecue.
Friedman says today’s buyers are much less emotional than they were several years ago and they are not willing to overpay for a house–even for one they love.
“Buyers will say this is my price and if the builder doesn’t like it, they’ll buy something else,” she said. “This is such a price-sensitive market.”
But competition among builders has resulted in happy consequences for home buyers. Some builders are bending on price. They also are packing their new homes with ultra-deluxe amenities to lure buyers.
DiamondSchreiber Homes, for example, builds spec houses that cost from $1.5 million to $4 million.
Unlike most spec builders, DiamondSchreiber doesn’t like to market its homes until they are complete. But the houses are loaded with all kinds of fancy features that other builders might be afraid to put in a house for fear of turning a buyer off.
“We know what people want,” said Susan Schreiber, partner at the Highland Park-based company.
DiamondSchreiber has a $3.5 million house for sale in north suburban Glencoe. The house has a home theater that includes old-fashioned movie theater seats and velvet walls.
Another house in Highland Park has a media room with three flat-screen TVs so you can watch different shows, or sporting events, simultaneously.
Another house has a library that Schreiber describes as being straight out of Cambridge University in England, loaded with wood paneling and built-in bookcases.
“Our buyers expect a home office where you can really work,” she said.
Donna Owens built a spec house in Kenilworth. She hopes to woo a buyer because the house has a novel timber-frame construction.
The five-bedroom, $1.5 million house is supported by beams made of Douglas fir that show on the interior. The ceilings are made of northern white cedar.
“It doesn’t look like a log cabin,” said Owens, a Kenilworth resident who sold her company, Sport Tours Inc., and jumped into the spec home market last year.
“The house has the feeling of a home in the Pacific Northwest. It provides a wonderful, relaxing feeling. I wanted to give the buyers something that would take the stress out of their lives.”
Home buyer Sperzel, who considers herself a spec home expert, cautions others about purchasing an expensive new home without conducting some research first.
She recommends checking the builder carefully and asking real estate agents to provide information about builders.
She added: “If you’re coming from out of town, you’re at the mercy of the agent.”
