The low-priced end of the new home market is getting the flashback treatment by locally owned Twilight Homes, whose entry level product line called Eos New Homes is aimed at moderate-income households that want to make the jump from renting an apartment to owning a new home.
The $79,990 base price that Twilight is asking for its least expensive home near Los Lunas is like a step back in time to the late 1990s, when families could find a starter home for around $77,000 on Albuquerque’s Southwest Mesa.
The Eos base price of $79,990 will get a buyer a 1,003-square-foot, two bedroom house in Las Maravillas subdivision, where Twilight has eight floor plans that range in size up to 2,730 square feet with a base price of $175,990. Prices vary somewhat for a similar menu of homes in the nearby Tome Vista subdivision.
In the Mountain Hawk subdivision at the north end of Rio Rancho, Twilight offers seven Eos floor plans starting with a 1,091-square-foot home with a base price of $139,990.
The median price of a newly constructed home in the Albuquerque metro comes in at a much higher estimate of $236,500, based on a Journal analysis of housing price data for October. Median means half sold for more and half for less.
The metro has a pretty typical housing market. In the third quarter, Albuquerque ranked 116 out of 223 metros in the Housing Opportunity Index, a measure of home affordability put out by the National Association of Home Builders and Wells Fargo Bank.
A household making HUD’s median household income of $59,400 a year for 2015 could afford to buy about 72 percent of the homes for sale during the third quarter, according to the index. Based on that measure, Albuquerque is similar to housing markets in Raleigh, N.C., Atlanta and Ann Arbor, Mich.
The key to the Eos product line’s low prices is a combination of factors such as cheap land and comparatively low development costs in outlying areas of the metro, said Twilight cofounder and veteran local home builder Vincent Pizzonia.
The homes lack the bells and whistles that drive up home prices — it’s linoleum floors and laminate countertops in the kitchens, for example — but have the same construction quality and energy efficiency as Twilight’s more expensive move-up homes, said Mike Fietz, another Twilight cofounder.
“The most important thing to note is these homes are not cheap, they’re affordable,” he said. “There’s some uniqueness to this.”
The base prices for the Eos homes are a starting point, almost like a loss leader in retail stores, that a buyer can customize with nicer finishes and amenities that add to the price.
At around 1,000 square feet, the lowest priced Eos model is also small compared to most new detached single-family homes now being built.
The average size of a new home nationwide is about 2,700 square feet, according to an analysis by the National Association of Home Builders. The comparatively large size in part reflects the finding that many new home buyers have strong credit scores and high incomes.
It also reflects weakness in demand for new entry-level homes. First-time homebuyers, who are the market for entry level homes, are generally considered a missing link in the housing recovery.
Based on the findings of a national survey, the National Association of Realtors reported in November that the share of first–time buyers had declined to 32 percent, the lowest since 1987. Historically, the long–term average is nearly 40 percent.
Twilight’s Eos line of homes is based on the premise demand for entry-level home will pick up as the economy improves.