By Angela Gonzales | Phoenix Business Journal
Miami-based Lennar Corp., which sells homes for an average of $515,000 in metro Phoenix, is introducing a more affordable home design that starts in the low $300,000s.
The homebuilder is launching a new series called Premier Homes, addressing the need for first-time homebuyers at a time when mortgage interest rates are keeping many potential homeowners in rental units.
The goal is to offer homes where monthly mortgage payments are in the $2,000 to $2,500 range, which is what many renters are currently paying in build-to-rent communities being developed across the Valley, said Michael Dowell, senior vice president of sales and marketing for Lennar.
Lennar was able to keep construction costs down by offering only three standardized plans for homes ranging from 1,250 to 1,400 square feet.
These aren’t stripped-down homes, Dowell said.
All the houses will include the same features of Lennar’s higher-priced offerings, including granite countertops, stainless steel appliances, shaker cabinet doors, Ring security alarm systems and oversized floor tiles.
They all will have three bedrooms, two bathrooms and two-car garages. They also are Energy Star rated energy efficient homes, allowing homeowners to save money on lower utility bills.
Lennar teamed up with its trade partners in an effort to bring workforce housing back into the marketplace.
“Everybody took a bit of a haircut to bring workforce housing back into the marketplace other than Maricopa and far Pinal County — communities that typically have the lowest price points,” Dowell said.
The trade partners bought into the idea when home construction slowed last year, because it allows them to keep their crews employed, Dowell said.
“At the time Lennar approached us with an appeal to partner in order to provide more affordable housing, we were certainly feeling the pinch of a declining new home market,” said Dave Sherwood, chief operating officer of Peoria-based Younger Brothers Cos, a residential trade contractor. “We were doing what we could to keep our workforce busy, but market conditions had forced us to consider other options, such as a four-day work week for some divisions.”
Today, Younger Brothers Cos. is keeping more of its employees working because of Premier Homes, Sherwood said.
Single-family homebuilding permits slowed drastically last year.
The 7,785 homebuilder permits issued in the second half of 2022 were down from 16,518 permits issued in the first half, according to the Home Builders Association of Central Arizona. Permits hit a low in December 2022 with just 822 permits issued, followed by 867 in January 2023.
By building the same floorplans without options, trade partners can build the homes faster, Dowell said. Realtors also bought into the concept, knowing they will get smaller commissions.
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