The troubled economy has not been kind to many Rhode Island home builders. The Rhode Island Association of Realtors recently reported that home sales in the state plunged 34 percent in July compared with the same month last year. Meanwhile, national studies are showing that Americans want smaller homes.
Alex Mitchell, managing director of Meridian Custom Homes, recently took some time to speak about the changing market and how his Providence-based company is responding.
PBN: Two recent surveys – the American Housing Survey and one by Trulia – indicate Americans prefer smaller homes today. How does a builder like you respond?
MITCHELL: Despite what we all read about Americans wanting to downsize we have not experienced that as our customers driving force behind wanting a new home or as a primary objective with their new home design. A well-appointed, well-built home with a comfortable floor plan that flows nicely and accommodates the way families live today are the most important factors.
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PBN: Rhode Island has been stung by the foreclosure crisis. With so many empty existing homes, why pursue new developments?
MITCHELL: We find our customers are challenged and frustrated with the process of finding an existing home that satisfies them. We monitor the available existing homes in the markets we are active in and surprisingly there generally none to very few homes that are nicely finished with the style and quality people expect today. It gets expensive upgrading these existing homes and usually requires the buyer to settle for something that really does not satisfy them.
PBN: I understand that Meridian will soon start construction on 16 pre-sold homes. Is the new trend for builders to sell the homes before breaking ground?
MITCHELL: Most builders are not building unsold/spec homes. This leaves very little new construction standing inventory. However, we maintain three unsold model/spec homes that are fully furnished by professional interior designers. Each home has a very different style and character from the other.
PBN: Meridian not only builds the homes but designs them as well. Why do both?
MITCHELL: While we are happy to build from a set of plans provided by a customer this is rarely the case. Most typically, the customer has many facets and desires to incorporate in their new custom home. We find we can better satisfy them by creating their home with them. Our goal is to completely thrill our customer in all respects. As a custom home design/build resource we believe can achieve this while taking into account customers cost implications during the design process, which helps eliminate surprises.
PBN: I understand you work in Rhode Island as well as outside of the state. How does business in the Ocean State compare with that elsewhere?
MITCHELL: We continue to be very active in Rhode Island. We currently have homes under construction in Barrington, Lincoln, Tiverton and South Kingstown and are working with prospects interested in Smithfield, Portsmouth and Exeter. However, this is a result of working really hard to satisfy our customers by meeting their design, customer service and pricing expectations.
