The house being built in Fletcher Meadows, a new subdivision in North Kingstown, has twin gambrel roofs with extra-large overhangs. Inside, it will have floors and stairs made of Brazilian cherry wood, and a fireplace made from locally found stone.
The owner, a Hewlett-Packard executive relocating to Rhode Island, chose every feature and finish. And not surprisingly, the house – which is being built by Wakefield-based Baud Builders Inc. – will cost more than $1 million.
Despite the general downturn in the home-building market, developers say, this segment of the market continues to go strong, and several houses like the Fletcher Meadows one are being built across Rhode Island and southeastern Massachusetts.
Nationally, construction of new homes fell again in May as the nation’s homebuilders contended with continued fallout from the crisis in subprime lending and rising mortgage rates. The U.S. Commerce Department reported on June 19 that construction of new homes and apartments dropped by 2.1 percent last month to a seasonally adjusted annual rate of 1.474 million units, 24.2 percent below the level of a year ago.
But wealthy homebuyers are still building custom houses locally at roughly the rate they were a few years ago, when the market was booming, said Alex Mitchell, managing partner of Providence-based Meridian Custom Homes.
The company will build about five houses with market values of $1 million to $2.5 million this year, and another three or four smaller custom-built homes costing $750,000 to $800,000, Mitchell said. The company’s high-end business this year will be stronger than in 2006 or 2005, he said.
Most of the million-dollar custom homes that Meridian is building are in Barrington, Rehoboth, Warren, North Attleboro and East Greenwich, he said.
“Over the last two and a half years, it’s been a growing part of our business,” Mitchell said. “We’re finding a lot of activity in that upper end, because there are a lot of buyers still looking to sort of enhance their homes. They can afford to be choosy. They can afford to make the decision that, ‘Geez, my current house isn’t all that I wish it was, so let me meet with some quality people and design something significant.’ ”
Many buyers of such homes are wealthy Rhode Island residents looking to upgrade into a luxury home, but a significant number live in New York, Boston and Connecticut and want to build weekend and summer residences near the ocean in Rhode Island and southeastern Massachusetts, said David Baud, owner of Baud Builders.
“We have some well-to-do people from the financial world in New York or Connecticut that want to spend a million or a million and a half dollars on a nice summer home,” Baud said. “Typically they’re buying a house that needs a lot of work, and they just tear it down and build a new one.”
But not all agree that the market for high-end custom homes is as strong as it was before.
“The $1 million plus market – I wouldn’t want to be heavily into it right now,” said Eric Johnson, owner of Portsmouth-based Oldport Homes, which builds about 25 homes a year, including a handful of million-dollar custom homes but primarily high-end condominiums and homes in the mid-market range.
One factor impacting the market for new custom homes in Rhode Island is the lack of available land near the water to build on, Johnson said. But perhaps the biggest problem that people are having right now is selling their existing homes so that they can purchase a new, more expensive one, he said.
“The market’s not bad. The hard part is people can’t sell their houses,” Johnson said. “That’s kind of putting a kink in the system.”
Baud and others who work exclusively in the custom building market say their success is heavily predicated on strong people skills. Baud works closely for more than a year with his homebuyers, architects and interior designers on each home he builds.
Aside from deciding what type of home they want, Baud’s homebuyers choose every interior and exterior design aspect of the homes, often picking details from the pages of consumer home magazines, he said.
“Everything on the house, you have a selection process, where the homeowner has the opportunity to select every finish on the interior and the exterior of the house,” Baud said. “What do you want for a front door, for instance. Are there going to be white cedar shingles or red cedar shingles on the outside of the house?”
