Homearama a risk worth taking for home builders, developers

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Homearama a risk worth taking for home builders, developers

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Contractors put the finishing touches on homes that are part of Homearama 2017, which is set for its 54th show, running until July 23 at Rivercrest at 1295 U.S. 22 in Warren County’s Hamilton Twp. GREG LYNCH / STAFF

Homearama can have a lasting affect on the community, developer and home builders that have invested time, effort and money into it.

This year’s Homearama, the 54th installment of the single-site new home showcase, started Saturday at Rivercrest in Hamilton Twp. and continues through July 23.

The show offers home builders high-level exposure that often makes it well worth their while.

“They get 30,000 people through their home over the course of the show, so they end up getting a lot of leads off the people who go through the house, even if they aren’t necessarily interested in having them build a house,” said Dan Dressman executive director of the Home Builders Association of Greater Cincinnati, which organizes the show.

Sometimes the benefits are eventual, with a guest approaching a custom homebuilder two or three years later with a request to build a home, but the risks can be great, as well.

“If they go into a show and they buy a (property) lot, which in a lot of cases the lots out here run $185,000 to $200,000, so you take a chance on buying a lot and then building a house and having the house sit and not have a buyer,” Dressman said. “So you’re paying that rent for a period of time if you don’t sell that house.”

The approximately $1 million overall investment in an entire home doesn’t always equate into a pre-sale before Homearama kicks off, according to Greg Williams, area president of the Cincinnati division of M/I Homes, Rivercrest’s developer.

“They’re building them for a future customer and … they want the home to be marketed well and look good, but they also have to be very sellable,” said. “Somewhere along the way they probably sell it and they work with the buyer to do the decorating. The risk is the amount of money that they put in as an investment to put a house out here and it’s only for two weeks.”

For two difficult week, a homebuilder must staff a home and have it open and ready for between six and 10 hours a day for Homearama guests.

“Most of these custom home builders don’t have that many people who work for them, so it’s an enormous investment in time besides building the home, working with the decorators to decorate it, then they have to staff it,” Williams said. “It’s an enormous risk on cash flow for them.”

That’s not the case this year, with four of the five show homes have been sold.

“I think that speaks well for where the market is at this point in time,” Dressman said. “There’s a lot of momentum in the market, I think there’s a great deal of consumer confidence, which we’re seeing in a whole lot of different price points, not just the upper end, like Homearama is.”

This year’s showcase features five area homebuilders, three of them long-time Homearama builders. Hensley Custom Building Group (Deerfield Twp.) and Wieland Builders (Fairfield) both have more 20 previous shows under their belt and Drees Homes (Ft. Mitchell, Ky.) has participated in several in the past 10 years.

High Pointe Custom Homes (Mason) participated in Homearama in 2009 and Justin Doyle Homes (Liberty Twp.) built its brand through Homearama in every installment of the show over the past six years, Dressman said.

“They came into this market from Lima back in 2011 and the first Homearama they built in, they were new to the market,” Dressman said. “They built in Foxborough and they got, I think, eight leads off of that house and they built eight houses in that price point back then and they just really took off and they’ve never looked back.”

Although constructing a home for the showcase can be an expensive endeavor, “it’s marketing dollars you’re spending,” Dressman said.

“Usually, they don’t intend on making a lot of profit off the Homearama home, but if they get a significant number of leads off of the home, it was worth their investment.”

Besides generating home sales throughout the region, another “benefit on the back end” for Homearama is what it does for the community that hosts it, Williams said.

While Rivercrest isn’t filled with homes in Homearama’s price range — the developer builds homes ranging between $250,000 and $800,000 — it took the risk of designing a street specifically for the show because of the foot traffic it generates.

“For us, the exposure is enormous (with) 30,000 to 40,000 people coming through here and seeing a beautiful neighborhood,” Williams said. “Looking off the back decks and what Mother Nature’s put out here for us, (it’s an) absolutely unbelievable place to live and raise your family.”

Most people have no problem differentiating between a community’s typical price point and that of Homearama homes, he said.

“Let’s face it, most people are not in the market for the price of these homes, so this may be your dreamer, you may get inspired from it and take elements of it and put it in a home that you can afford or get decorating ideas from it,” Williams said. “I don’t see a downside of it, from a developer’s standpoint.”

Jeff Wieland of Wieland Builders said the effort and hard work are worth it for Homearama, which he said is “the perfect opportunity” to spotlight a home builder.

“We want to be able to show to the public what we can do, show our quality and let them come through our home,” Wieland said.

Sure there’s a risk, but “as builders, we risk everyday,” he said.

“It’s certainly an investment on our part because there’s a lot of staging, there’s a lot of planning and there’s a lot of things that happen,” Wieland said. “Most of the builders, they choose the lot before the show actually gets awarded in hopes of selling it.”

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