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Program finds home in San Ramon - Model House at Windemere will be used as a set for investment series aired on PBS.

San Ramon - A PBS financial program is using a Dougherty Valley home as a set for filming its upcoming season.

“MoneyTrack” a weekly series that educates readers about investments, was looking for a home to use a set for co-hosts Pam Krueger the show’s creator, and Jack Gallagher to show packaged pieces on various investment topics.

The show looks for a model home to use a set, because many financial decisions are made in the home, said Katie Horgan, the show’s associate producer and marketing manager.

They look for houses in communities that represent a slice of “Americana” — and they found it at a model house on Emerson Lane in the Windemere development. The neighborhood amenities, such as its 18 parks and five schools, won over the show’s producers. Windemere first opened in 2002 and will have about 5,000 homes at build out.

“They have the parks, the community center,” Horgan said.

An 18-member crew filmed at the location Wednesday and will be filming again today. They will return later in the year to do more shots.

The house will be used in about 10 of 15 episodes of the series’ third season, which airs on more than 200 PBS channels.

The episodes will begin airing in September. The program aims to show success stories of everyday people as well as offer advice from big name financial experts such as Warren Buffett and CNBC’s “Mad Money” personality Jim Cramer.

Windemere — a 2,300-acre, 5,200-home master-planned community in San Ramon, Calif — has been open for about five years and had about 400 homes left to sell when its marketing firm, Danville, Calif.-based EMC Creative, rented a helicopter and took some Bay Area reporters up for a bird’s eye view of the community.

No doubt the reporters were a buzz at the prospect of taking a breathtaking afternoon excursion, but it wasn’t all spectacle. “This was the best perspective at which to view this community, for journalists to understand the scope and scale of the project,” says Scott Tiernan, senior director of marketing communications at EMC.

The timing was right, because during this final phase of build out, most amenities – including a $150 million dollar high school, four other schools, hundreds of acres of open space and more than 20 parks – were complete and primed for viewing.

Not only was a vivid picture planted in reporters’ minds, it was reinforced by photography taken by a professional aerial photographer and provided to the media afterward to be published or broadcast at their respective outlets. “This has generated some very positive news coverage, with more to follow,” says Tiernan. “Windemere’s sales pace is impressive, especially in a market impacted by foreclosures, mortgage meltdowns and credit crunches.”

Most others remain on sidelines as prices plunge.

First-time home buyers Andrew and Kaori Nielson made a deal on a two-bedroom San Jose townhouse last month, even though they know that property values are falling.

“We probably would have waiter longer, but our lease was up, and we have our son,” Andrew said, referring to the couple’s 6-month-old baby. “We thought now was the time.”

Would-be home buyers in weakening markets worry about “catching a falling knife”- not wanting to ink a deal before home prices hit bottom. Yet home sales in Santa Clara County were up 14 percent in November from the same month a year before, despite a 39.5 percent plunge in the median price of a single-family home.

That raises the question: Who’s out there buying the homes?

Current home shoppers experts say, generally fall into two camps: first-time home buyers and investors. Almost all other buyers remain on the sidelines, either because they’re unable to qualify for low interest loans or because their current home has lost so much value they don’t have enough equity for a down payment on their new one.

“The majority of buyers are first –time ever home buyers,” said Intero real estate agent Pete Smith, who last week toured five properties with a client who hopes to buy a house in central San Jose for about $350,000- a price that would have sounded laughably low just a year ago.

No hard data is available to determine which purchases are made by first -timers and which by repeat owners. But real estate and mortgage professionals say most buyers now in Santa Clara county are, like the Nielsons, first-timers drawn to the market by lower home prices and falling interest rates.

The Nielsons, who had outgrown their apartment in San Mateo and wanted to move closer to Andrew’s new job in Los Gatos, concluded that sitting tight was no longer an option. The couple bought their townhouse in a community built by SummerHill Homes in San Jose’s Cambrian neighborhood, paying just over $500,000.

Investors jump in

But investor buyers are getting into the market as well. Public records show that investors – identified as absentee owners – now make up a larger segment of Santa Clara County purchases than they did a year ago or five years ago.

Alexis McGee – president of Foreclosures.com, which offers seminars and coaching for investing in foreclosed properties – said clients used to ask about flipping foreclosures. Now they ask about renting out and maintaining properties.

“You can actually get positive cash flow,” she said. “Even if the market stays flat and they don’t see any appreciation for a while, they’ll know the rents can cover the mortgage. That’s something that’s been unheard of in the Bay Area recently.”

During a three-month period ending Nov. 21, investors made 11 percent of home purchases in Santa Clara County, according to figures compiled for the Mercury News by MDA DataQuick. In the same period last year, 8 percent of purchases were made by investors.

Investors and first-time buyers alike seek bargains on homes repossessed by banks. Among the eager ranks of first-timers in San Mateo renter and Web designer Jackie Buttice, who has toured at least 30 bank-owned properties and made four unsuccessful purchase offers in the past three months.

“Literally everything is going over the price that it’s listed,” she said “Everyone’s scrambling right now for a house under $400,000. It’s the hottest market.”

Many first-time buyers have a new tool at their disposal: loans insured by Federal Housing Administration. In recent decades, FHA loans were rare in Santa Clara County and other high-priced parts of California because of the loan maximums set by the federal government were too low. But now the loan limit is $625,500 and buyers this year need down payments of 3.5 percent to qualify.

Eleven percent of Silicon Valley home purchases in the three-month period studied were financed with FHA loans, which are intended primarily for first-time buyers. Over the same period of the year earlier, 0.1 percent of buyers used those loans.

“FHA loans are amazing,” said Milpitas real estate agent Marie Pham, who has worked with several first-time buyers this year. With low down payments, low rates and less reliance on credit scores than traditional loans , FHA-insured mortgages are tailor-made for real estate newbies, she said.

Even those who don’t qualify for FHA loans can find rates that are low by historical standards. Rates for conventional 30-year fixed-rate loans of $417,000 or less- typically loans that meet lending criteria set by Fannie Mae and Freddie Mac and carry the lowest rates – averaged 6.11 percent in the September-to-November period, according to Freddie Mac.

Because of falling prices and the sales surge of lower priced homes, the average mortgage for Santa Clara County homes bought in the studied three-month period was $410,204, down 19 percent from $496,200 for the same period in 2007.

Sales up 14%

All told, 4,721 new and previously owned houses and condominiums changed hands in Santa Clara County in the three-month period that ended Nov. 21. That was 14 percent more transactions than during the same period last year.

Nearly all the increase is because of rising sales in the most affordable ZIP Codes, which have been hardest hit by foreclosures.

“Move-up” buyers who need “jumbo” loans of more than $625,000 remain the sidelines. Jumbo loans are funded by private investors or large lending institutions and are not backed by Fannie Mae or Freddie Mac. Rates for those loans remain above 7 percent, on average.

“The real question is: When is the jumbo money going to be available to those who would like to utilize it?” said Joe Brown president of Coldwell Banker in Silicon Valley. Without better rates for those loans, he added “everybody is sitting tight.”

Developer knows credit is still tough, but hopes changes will help

Robert Freed vividly recalls the first house he saw under construction. When he was in second grade, his parents built a home in Saratoga.

“There was a point in time when the foundation had been poured,” he said. “I walked it with my grandmother and grandfather; they put coins in the corners of the foundation to bring us good luck. It was the first time I knew of such a tradition; I remember the experience being so wonderful.”

Since then, Freed has gone on to mastermind the building of umpteen homes around the United States as a senior executive at KB Homes, Davidon Homes and Blackhawk Corp.

These days, Freed has returned to his Bay Area Roots as CEO of builder SummerHill Homes of Palo Alto, which has projects under way in San Jose, Palo Alto, Menlo Park, San Bruno, South San Francisco, Fremont and Union City. Its focus is infill development-using land within build-up areas – which he considers the right approach for the Bay Area. SummerHill projects range from smaller, single-family detached homes to condos, with density per acre ranging from “north of 30” to six units.

Freed joined SummerHill in September 2007 – just after the credit crunch really walloped the already-foundering real estate market.

“My timing could be considered either impeccable or unfortunate,” he said dryly.

He sees his role as guiding the company through the turbulence and positioning it to emerge strong amid a shrunken field of competitors.

While the entire real estate market is reeling from the foreclosure crisis, plunging home prices , drastically tightened lending and this year’s Wall Street meltdowns, home builders are among the most affected.

“It’s been a brutal year for new home builders, especially for private builders,” said Patrick Duffy, principal of consulting firm Metro Intelligence Real Estate Advisors in Los Angeles. That’s because private builders rely heavily on bank financing, which has been effectively shut off in recent months, he said. Public firms have more options, such as lines of credit and selling stock.

The industry’s own trade group, the California Building Industry Association, said home building is in “dire straits.” The pace of home sales in October, for instance, was “extraordinarily bad,” it said, down 63 percent from a year earlier. New-home starts have plunged to record lows. CBIA projects that only 66,000 new homes and condos will be built in California this year, compared with 160,500 in 2006.

Duffy said SummerHill’s saving grace likely is that it’s owned by Marcus & Millichap, a national real estate investment brokerage from Encino (Los Angeles County.) “I would think having Marcus and Millichap behind them would be analogous to having a public company behind them,” he said. “That leverage probably helps.”

Freed doesn’t mince words when talking about the obstacles.

“This is definitely the most challenging and most severe downturn I’ve experienced,” he said. “It gets tougher and tougher to secure financing. Revenues are clearly down. Absorption rates-the rate at which one sells-are clearly down. There are fewer buyers, and they’re looking for what they perceive to be bargains at the expense of the seller. It’s like daily hand-to-hand combat.”

Like most of its competitors, SummerHill has had to reduce staff significantly, shrinking from about 125 positions to 80. At the same time, “We’ve taken the opportunity to hire some very senior people who became available to us because of the downturn,” Freed said.

In another move to be rebound once the market turns around, “We’ve made a conscious decision to maintain staffing levels in land acquisition and forward planning”-obtaining government approval, for instance.

The homes now in the sales pipeline are part of the projects initiated in 2005 and 2006. “They have very little profit,” Freed said. “We’re trying to recapture any equity left in the deals to generate cash, reduce our debt and position the company with leaner balance sheet as we move forward.”

He’s not optimistic about the $700 billion bailout loosening banks’ purse-strings any time soon.

“I think 2009 will be difficult time for firms such as ourselves to close on properties where the closings need to be financed with bank debt,” he said.

His workaround? “ To look at controlling a few good properties in 2009 where the close of escrow is not calendared until 2010 and beyond.”

The development timeline is so long, with so many months of city and environmental permits, that that kind of planning is necessary anyway.

The one exception would be if “distressed assets” come on the market. In that case, SummerHill would try to snap them up-and he thinks the financing would be available.

“The money sitting on the sidelines in residential real estate is waiting for distressed sales where there is more profit.” He said.

Freed has some thoughts about steps the government could take to address the housing market and economy.

In assessing how to tackle the foreclosure crisis, he thinks it’s important to distinguish people who bought homes they simply cannot afford, and those who can continue to make payments but are discouraged because their home values have declined. For the former group, “we have to recognize that we can’t save their homes.” He thinks facilitating the foreclosure process through a simple way for them to sign over their home, perhaps in exchanging for renting it for 12 to 18 months, make sense.

For the latter group “ those people who made good decisions” but now own homes worth less than their mortgages, he thinks the government could give them a tax credit for the next five years to facilitate their staying in their homes and keeping current on their mortgage.

Like virtually everyone in the building and real estate industry, he thinks lower mortgage rates will help revive sales.

“What will clean up the housing mess more quickly than anything is affordability,” he said. “When these homes because more affordable because of lower interest rates and decreases in value, that’s where we will find the bottom. People will buy houses because they can see they can afford them.”

While for some, each work experience is used as a tile o lock creating a path which leads to the next project, Colleen Edwards, a home building industry expert, also layers those blocks of experience to lift her up and enable her to gain a better perspective of how home building can be improved and better meet the needs of tomorrow’s buyers.

And what she sees are smaller neighborhoods, plus more and more “green” concepts being integrated into new home communities as well as a transition to “healthy home” features that embrace a wider definition of quality of life.

“Homebuyers of the future will have even higher expectations... I believe homebuilders will really deliver.”
Colleen Edwards of EMC

Commenting on this time period when homebuilders have dramatically slowed their projects and delayed some indefinitely, she is confident that great benefits will come in the future as the builders carefully examine their past practices and their plans for the years ahead. Her collaborative efforts with homebuilders have given her a positive perspective about the future of home building, not only in California but actually in many corners of the world.

“Builders won’t come back [in the months and years ahead] with the same old ‘stuff’,” she said. “They are taking time to figure out what buyers really want. And they are rethinking how they build homes, not just how to build more cheaply,” she said.

Particularly in California, where Edwards has focused most of her attention over the past few decades, she finds the builder community “is more focused” and looking beyond the homes to the complete neighborhood environment. This new focus means that land plans for new developments are carefully crafted with an eye to green living and quality of life.

Today’s master planning incorporates walkable neighborhoods with community gathering places as well as natural open spaces, she observes. Lots may be smaller than traditional ones of past years, “but we’re changing the definition of ‘your backyard’,” she said, by adding community parks and other nature features.

In newer neighborhoods there are multiple parks, there are trails for bicycling and walking, there are many features that encourage an outdoor, recreation-oriented lifestyle. School playing fields become joint-use fields, for example, so that more athletic events can be enjoyed in an area, promoting sports for players of all ages. For example, Edwards notes the Windemere community (with homes built by Brookfield, Lennar and Centex) in San Ramon, where the builders and developer teamed to create new schools with playing fields that are used during the school day as well as on the weekends, with city support for their maintenance.

And “open space” in a land plan...“it’s okay that it’s natural, not landscaped,” as the hills that ring Windemere attest, Edwards noted. Small neighborhood parks provide settings for active pastimes — games, running and play equipment — as well as social gathering spots for parents and grandparents.

“It’s a return to a small town setting,” she observed. She predicts that more and more developments will locate schools within smaller residential neighborhoods, encouraging parents and grandparents to walk to children’s schools instead of loading the youth in the car for a ride to school. “It’s just healthier,” she added. Walkable neighborhoods also encourage socialization between neighbors and enhance the daily experience.

Windermere did it — the land planners and the developers worked hard to help redefine the concept of neighborhoods and community. Others are following suit, both in the few undeveloped areas left in Northern California, as well as in areas that can be modified for a new purpose.

For example, at Hunter’s Point in San Francisco, land planners and developers are assessing the former military property, looking to repurpose some of the old buildings and “blurring the edge between old and new,” according to Edwards. The master planner, Lennar, has embraced the concept of mixed-use areas, she said.

“This [mixed-use] concept is filled with potential. It’s a 24-hour clock, not just a commute time or a school day.” People don’t just come home at night and go to sleep. Neighborhoods should reflect that, Edwards believes.

At Hunter’s Point, that means preserving the artists’ community which has occupied parts of the area for years while also building retail and residential areas. She predicts that future buyers will be “blown away” by the possibilities that the land planners and architects bring to life.

“People often don’t even know what’s in their own backyard,” Edwards said. They haven’t seen the bases and will likely be surprised at the many beautiful elements that exist in areas such as former bases — wide spaces, beautiful views, proximity to other attractions.

While builders await a better economy, they are focused on the future, and how they can better serve their buyers, offering convenient and mixed communities with a variety of services — schools, libraries, retail, transit stations and green or open spaces. Many of the same principles are being followed in infill housing projects as well, she reported. “Infills are by nature ‘green,’ because [such developments] are smaller neighborhoods, close to commute and job centers and encourage people to get out of their cars,” Edwards said.

Add in the new materials being used in construction and these developments are great for the environment and for the residents.

“All homebuilders in the Bay Area are aware” of the possibilities for change, “and are starting to integrate new thoughts, ideas and perspectives in their plans,” she said. “It goes beyond the four walls and roof,” she said.

“This slowdown is allowing builders time to test drive their ideas, to really plan carefully for future developments,” Edwards added. “Buyers of the future will have even higher expectations and I believe builders will really deliver.”

Neighborhoods which encourage social interaction among residents, and opportunities for enjoying the outdoors also will likely integrate more green features in the building of the homes themselves. Edwards likes to term it “healthy homes” instead of the narrower focus of “green homes.”

This thinking “embraces the concept of healthy building materials because buyers are not only interested in energy savings, but in ‘what’s the quality of life for my family?’, she predicts. This includes healthier paints, carpeting, flooring, ventilation options, as well as elements that insulate, provide passive heating or cooling, or make homes easier to maintain. And builders in the Bay Area are increasingly working with groups such as BuildItGreen and other programs which rate a home’s green features as well as its health, probably more so than many other areas around the country.

“Green is the norm now, and the buyers of green homes are generally more satisfied — emotionally and intellectually, they want their home to be healthier.”

Many developments in the Bay Area are seeking or have received good ratings from BuildItGreen (builditgreen.org). Ratings factor in healthy materials as well as use of recycled or sustainably harvested wood, water and energy-saving practices and the features of a complete neighborhood as the norm, she believes.

Colleen Edwards is a co-founder and CEO of EMC Creative, Danville, a communications and marketing agency that has, for nearly 30 years, worked closely with homebuilders, master-planned communities and land use development companies. She has been awarded the Lifetime Legend Award by the Homebuilder’s Assn. of Northern California and is in the California Building Industry Assn.’s Hall of Fame. In recent years, she has worked with builders and architects to research and develop housing projects in such destinations as China and Europe.

San Ramon - HomeAid Northern California raised more than $100,000 at its seventh annual Trap Shoot recently. Money raised from this event at the Livermore-Pleasanton Rod and Gun Club pushed the organization’s seven-year total to more than $1 million.

A crowd of over 500, most from the regions home building industry, attended in support of HomeAid’s mission to provide shelter for those less fortunate in the Bay Area, and help them become more productive members of the community.

Julie O’Connor, executive director of HomeAid Northern California, expressed her gratitude.

“We are grateful to the Livermore-Pleasanton Rod and Gun Club, our sponsors, the home builders and all of the volunteers and participants. It is really because of them that this event has been so successful year after year. Our trap shoot event literally raised the roof on homeless shelters and in the process, we have generated hundreds of thousands of dollars.”

Participating home builders included Pulte Homes, Brookfield Homes, DeNova Homes, Shea Homes, Standard Pacific Homes, Ponderosa Homes, William Lyon Homes and Shapell Homes.

2008 HomeAid Chairman Steve Kalmbach, extended appreciation to the home building companies that continually give generously to HomeAid through the Trap Shoot.

“These are many of the same people who also work year round providing ongoing support, materials and labor for HomeAid’s shelter projects.”

De Nova Homes won High Score tem trophy this year. In addition, HomeAid presented the Spirit of Hope Award to Dave and Lori Sanson of DeNova Homes. This special award goes to the person(s) who best represents HomeAid’s mission in advancing the organization’s goals.

The Dogs of War team from Joseph J. Albanese Concrete in Santa Clara, led by Matt Maes, participated for the first time. On behalf of HomeAid, Albanese donated nearly $15,000 in concrete construction, services and materials to the Livermore-Pleasanton Rod and Gun Club.

For Information, contact Julie O’Connor at 925.820-7626x 218 or visit www.homeaidnc.org.

What’s the luxury housing market like in China,” asks Colleen Edwards, smiling. “It’s California Tuscan goes to China.”

When China’s new wealth goes house shopping “they want to re-create success,” says Edwards, CEO of Danville-based EMC Creative-a strategic communications firms for homebuilders, land development companies, and master-planned communities. She recently toured a number of residential developments in several Chinese provinces.

“There is so much money and such great desire to have what looks best from the West,” Edwards explains. “There is no sense of adapting to place or local needs. The wealthy Chinese want residences that recreate successes, especially from the West Coast-from California.

“I was struck with how little customization is done for the Chinese market, because there is little market research,” she notes.

Established Success

Edwards’ guide for the trip was a friend and associate Chip Pierson, principal and general manager of Dahlin Group Architecture Planning, headquartered in Pleasanton. In 2001, Dahlin Group recognized a growing opportunity and opened a marketing office in Beijing, which was grown to a full-service firm with staff of 40.

“The U.S. is so flat right now in terms of new projects and when I went through a list of California-based architects, I found almost everyone is doing projects in China,” says Edwards.

“I wanted to get a sense of what was going on there, how they were doing things, and what opportunities there might be for American firms. Dahlin Group has an office in Beijing, which has worked on communities across china, and having Chip Pierson show me around would permit me to see master planning in several locations, rather than just one building or one project.”

Surprising Differences

Edwards returned from China with comparative observations on master-planned communities, marketing, and how business is done.

“In China, the planned communities are all residential. In the U.S. to get things to pencil out, there invariably has to be at least some consideration give to include a mixed-use component. We think about place making-how people will put down roots- when communities are designed. In China, there’s no sense about “where.” The buyers of these luxury homes are escaping the urban crowd. It’s a Chinese version of urban flight.

“No one speaks English-they don’t have to. Business is transacted visually so be prepared with a PowerPoint and most importantly, a translator. There is no master message in marketing residential developments. The billboards don’t look like the Web site, the printed materials are different, there’s no sense of integration or synergy in terms of marketing. The signage in China is all phone-number based whereas here we drive everything to a Web site.

“Architectural styling and design concepts from California are very suitable for the Chinese sensibility. We don’t have to go through the feng sui exercise, because we design that for everybody already. In design, it’s all about reflecting their financial success. It’s all about the glamour. The Chinese so want it now! In these communities there are sound walls, non-traditional landscaping, and shutters. It’s not Chinese, it’s California – West Coast. But it’s what they want,” notes Edwards.

Western Sensibilities

Pierson, who has worked with Chinese developers for more than seven years, agrees. “The Chinese are stridently European in their taste for residential design. Here’s an example: In Beijing there was a subdivision that was a reproduction of the Forbidden City - right next to other developments that were Western and called ‘Napa Valley’ and ‘Orange County’. Here’s the irony: the Europeans bought the homes in the Forbidden City and the Chinese live in the Western-style developments with West Coast names.”

Edwards, whose firm is based near San Ramon in the East Bay, laughs when she points out, “One of my favorite discoveries during our trip was a development called San Ramon- part of a master-planned community in Chengdu designed by the Dahlin Group. Sounds as if the Chinese ‘San Ramon’ community is right next door.”

Among other surprises for Edwards was mao pei — the Chinese tradition of buying the unfinished shell of a residence and completing the interior after purchase. “There is a luxury development called Shanghai Rose Gardens, built by the Shanghai Greentown Development Company, where the shells are priced at the equivalent of $9 million. It is not unusual for a homebuyer to easily spend another $2 million to finish the inside. But the lot itself is sold completely landscaped.”

Return to Luxury

Money, and plenty of it, has been driving the Chinese luxury market, notes Pierson. “But the concept of single-family homes in China is relatively new- or at least a return to something that Chinese families haven’t had for generations.”

Another part of the Chinese housing boom equation, he adds, is that many of the residential developers are people who have made their money in other business endeavors. “They provide the money and pass on the designs. And in some cases, they make huge profits,” Pierson adds.

China’s development during the past 30 years has seen its economic position leap-frog from isolation to a position as one of the world’s largest economic engines. A critical economic policy change was the Chinese government’s shift away from providing housing. This allowed the government to pass along the financial burden to private ownership and simultaneously create a spectacular residential building industry. And although residential construction has slowed somewhat this year form the frenetic pace of recent years, average annual housing starts for the past five years have been more than 20 million per year.

Massive Demographics

China has nearly four times the population of the United States and most Chinese are urban dwellers. Incredibly, there are more than 200 Chinese cities with a population of one million or more, compared with just nine in the United States. More than 75 percent of the population lives in urban multifamily housing, and one third of Chinese city dwellers live in high-rise apartment buildings. Low-density housing, which includes high-end luxury homes, built for China’s newly minted wealthy and a small, but growing number of expatriates living there, account for less than one percent of urban housing.

While the luxury market reflects growing individual wealth in China, the demand for affordable, high-density housing remains the national priority. “In 2006, the government ordered 70 percent of high- rise units be 930 square feet or smaller, to insure affordability,” says Pierson.

Edwards and Pierson agree that foreign firms wanting to do business in China must establish the relationships that have traditionally been at the center of Chinese business. “It takes time,” notes Pierson. “I’m glad the Dahlin group has been in China for seven years, because there is a builder or developer makes the decision to embark on the business development in China, it’s just as important to have their own house in order and running smoothly, so to speak, back in the United States.”

Visitors to Sunset magazine's latest Idea House will see more than the latest whiz-bang ideas for home design and decor.

They'll also see a house that's part of a new-home development rich in the magazine's and Menlo Park's history.

The Idea House, called Residence Six, is part of Lane Woods, 32 single-family detached houses that SummerHill Homes is building along Willow Road just west of Sunset's headquarters.

While the Idea House is about 2,998 square feet, the other two-story houses range from 1,719 to 2,429 square feet. Their prices start at about $1.5 million and go up to more than $2 million.

The Idea House opens Friday. Although designed by the same architect, its floor plan differs from the rest. It will not be available for sale until the exhibition closes at the end of August.

Lane Woods' 4 1/2-acre site was once part of 7 acres owned and used by Sunset, which had a 40,000-square-foot office building there. Like others on the Sunset campus, it was designed by Cliff May, famed for his ranch-style houses.

Like the nearby Civic Center, Sunset's acreage was carved from Sherwood Hall, also known as the Hopkins estate, which once covered 400 acres between Ravenswood Avenue and San Francisquito Creek. Timothy Hopkins received it as a wedding gift from his adoptive mother, the widow of railroad magnate Mark Hopkins. His bride was her niece, and he had been managing the family's financial affairs.

Lane Woods gets its first name from the family that founded Sunset. Its second name comes from the 198 trees that were on the site. SummerHill is saving 100 of them, including 11 that are to be transplanted, said Elaine Breeze, the Palo Alto company's senior vice president. It's planting 76 new trees.

"Preservation was a big deal for us and the community," she said. That's why a courtyard from the office building has become Lane Woods' centerpiece park. Ringed by mature trees, it has several benches around a fountain in the courtyard.

There's another small park along Paulson Circle on the project's north side.

A path worn by people cutting across the site is becoming a public bike and pedestrian path that includes the neighboring Morgan Lane residential project. On the south, it links to a foot bridge that crosses San Francisquito Creek into Palo Alto.

The split-rail fence around the project echoes Sunset's fencing.

Designing the project was "all driven by the trees," Breeze said. Therefore, lot sizes vary, as do the houses' shapes. For example, Residence Three, one of the two model homes, is wide and shallow, allowing "us to preserve the row of ash trees along the back," Breeze said.

Trees even determine the location of the two-car garages.

In the Residence Three model, it's on the right rather than facing Willow Road. With no huge door dominating the streetscape, it looks like a more integral part of the house.

Cost close to $2 million
Residence Three, with four bedrooms and 2 1/2 bathrooms standard, has 2,392 to 2,429 square feet, depending on the garage's location. Its price ranges from $1.8 million to $2.05 million.

Approached from a small front porch, the front door opens to an entry hall centered between the dining room and a library. Both rooms are two steps down from the entry, lending a sense of formality and symmetry.

The cozy library has a gas fireplace. As an option, the library can open to the family room, or it can become a bedroom with a closet replacing the fireplace. If this space is configured as a bedroom, the half-bath off the entry hall becomes a full bath.

Continuing the entry's symmetry, the stairway is opposite the bathroom. The entry then leads to the family room and kitchen, both two steps down. The family room has an optional gas fireplace. Patio doors lead to the shallow backyard.

An island defines the kitchen, whose main working area is L-shaped. Along one wall are the coat closet, oven, refrigerator space and pantry as well as a passage to the dining room.

The kitchen is equipped with Wolf stainless steel appliances, granite counters, maple cabinets and 18-inch-square ceramic tile flooring. Similar cabinets are used in the bathrooms, while similar tiles are seen in the bathrooms, nook and entry.

Across from the dining room passageway is the laundry room, with sink, cabinets, window and space for side-by-side appliances. Just past the laundry room is the interior door to the garage, which also has a door to the backyard.

Upstairs, the landing overlooks the entryway. A linen closet and full bath with two sinks also are in this area.

The model has a loft to the right that can be configured as a bedroom. Both options have a door leading to a deck over the porch.

Two other bedrooms are on this side of the house. The larger one is shown with two full-size beds and a window seat.

The master bedroom occupies the rest of the upper floor. It, too, is shown with a window seat.
Big bathroom, closet

Almost as large as the bedroom, the master bath includes a walk-in closet just inside the door. The bathroom itself has a toilet closet, oval tub, shower stall and marble-topped vanities that are conveniently opposite each other.

All of the houses are GreenPoint Rated. This program stresses - among other factors - energy efficiency, resource conservation and indoor air quality. They have dual-zone air conditioning and forced-air gas heating, 50-gallon water heaters with recirculating pumps to all fixtures, and wiring for ceiling fans in the family room and master bedroom.

They're also wired for high-speed networking.

As part of a city requirement to provide below-market-rate houses, Breeze said, SummerHill is donating "upward of $2.5 million" to Habitat for Humanity, which is building a 22-unit affordable project in Menlo Park.

The Sunset Idea House will be open 9 a.m. to 6 p.m. Fridays (except July 4), Saturdays and Sundays from June 27 through Aug. 31. Tickets, available only at the door, are $15 general, $5 for those ages 6 to 12 and free for those 5 and younger. People 60 and older receive a $3 discount on Fridays. Credit cards are not accepted.

For details call (800) 786-7375 or go to www.sunset.com/sunset and click on Idea Houses.

Housing has changed. The American dream, for many, has become an attractive condo or townhome built with sophisticated features such as granite countertops, stainless steel appliances, and open kitchen/family room spaces. Throughout the Bay Area, new communities are sprouting up which offer a variety of home buyers opions for comfortable homes in well-located urban sites. Several of these modern communities were conceived and built by Taylor Morrison.

Urban infill is increasingly the source of new homes for Bay Area buyers, and Taylor Morrison is a prominent provider of these home developemnts which stress wise use of space proximity to jobs and transit, shared park spaces and, very importantly, according to Vickie Nyland, Northern California division president for Taylor Morrison, "attainable price points."

"Our MO [modus operandi, or way of accomplishing a goal] for the last sever years has been in these kinds of communities - homes with attainable price points, close to transit and to work. Our core is the Bay Area, particularly Contra Costa, Alameda, San Mateo and Santa Clara counties: We're very location oriented."

Understanding their demographic, a mix of singles, married couples, retried people as well as families with children, the home builder has focused on urban infill as a way of providing convenient locations, attractive architecture and ecologically sound features.

"Reuse of land is of our main areas [of focus]," explains Nyland. The company has zeroed in on light industrial areas that could be redesigned for housing and are near emerging and established employment centers. For example, communities in San Jose attract buyers who may work in Fremont and Hayward, while buyers in Concord are close to BART, could work locally or commute to San Francisco or south to Pleasanton.

These new neighborhoods are different from developments of just five years ago. They're denser, said Nyland, but most offer parks which residents can enjoy. They are also more affordable and have higher levels of features. "Providing a higher level of quality gives these people a good experience," said Nyland.

Respecting the cultural diversity of new buyers, among them many Asian and East Indian customers, "We show appreciation for their cultures" and work to design living spaces that will appeal to their traditions and preferences. For instance, notes Nyland, the company integrates principals of feng shui into home design.

Some neighborhoods are also designed with a younger demographic in mind, including Modern Ice, a development in San Jose that "is a bit denser and has more stairs," describes Nyland, but is appealing o younger, hip buyers, many of whom are making their first home purchase.

"It's fun to see the excitement of these buyers. They are showing that they really trust us to help them through these new steps [towards home ownership]."

In some cases, according to Nyland, lenders with whom the builder works are gibing seminars to help potential buyers understand the loan process, and sales reps for Taylor Morrison also educate buyers about homeowners' associations and the requirements, dues and benefits of such associations.

Neighborhoods of townhomes and condos may be denser, but they are also more energy efficitent and each has distinctive characteristics.

"I push us towards functionality," she says, "It may be dense, but we have to provide good living spaces, with good flow and function that works. Architectural features change, colors change and attached projects' are being designed for their sites and the ambience they can bring to a community. "We know how to do this really well," notes Nyland with pride.

She continues that the home builder aims for great kitchen orientation, for example, stressing that the flow from the kitchen to adjoining space is very important: "Our kitchens are built to have interaction. That's the gathering space," she insists. And, she likes to include deck space for a barbeque.

As for energy issues, Nyland observes that the definition of energy efficiency has changed over the years, and progress continues. "We're integrating different features and staying in a reasonable cost spectrum. Consumers aren't yet ready to pay" for many of the eco features, but tankless water heaters, man-made stone and Corian instead of marble, and conservation practices in construction - recycling of building materials, use of fly ash in concrete, for instance, are ways Taylor Morrison works to minimize a community's carbon footprint.

For the long term, they are evaluating future building practices according to some of the green construction programs now being formulated on a wider basis in the Bay Area and California.

"And, by building in urban areas we are helping save fuel and lessening the area's footprint," she reminds.

"Builders are on the forefront of encouraging cities to change from industrial to residential," she continues. "A key element is that we have a vision and show them [a city] how good the area could look in a few years. Color, architecture, green areas, interesting streetscape...once a city starts" encouraging a revamping of older areas nearby.

In today's home market, no discussion would be complete without talking about prices. While some builders have featured higher prices, then provide incentives, Taylor Morrison takes a different tack. "This is another reflection on me," notes Nyland. We aim to set the right price for the market. We are fair and competitive and we want our prices to show that." The company does work with individual buyers and may provide interest-rate buy downs or other benefits. With Nyland at the helm, watch for Taylor Morrison to "continue what we do well, offer attainable price points and keep our eye out for housing in the right spots in the Bay Area."

Visit www.taylormorrison.com for information on Bay Area home communities.

Finally, a glimmer of good news for Silicon Valley home sellers: Home sales were up 30 percent last month compared with March.

That was the steepest March-to-April increase in almost two decades for the county, according to DataQuick Information Systems, and it came after several months of record-low sales figures.

"You've finally hit a price point that is attracting people back into the market," said David Martz, an agent with Intero Real Estate. In San Jose's Alum Rock neighborhood, for example, homes priced at $350,000 or $400,000 are selling, while in the Rose Garden neighborhood, a bargain could mean finding a home in the high $600,000 range, he said. "There are some great deals available."

But it's not clear the rebound will last, cautioned DataQuick's Andrew LePage, discussing the figures released Tuesday. "We don't know how deep this demand is, even at the discounted prices."

While the sales trend may be a ray of hope for home sellers, price trends are favoring buyers. The median price of the existing houses that changed hands in Santa Clara County last month was $699,500, the company said. That was down 12.9 percent from $803,000 in April 2007. The median price of condos sold in the county slid 13.5 percent from a year ago, to $467,000.

A total of 1,440 new and resale houses and condos changed hands in Santa Clara County in April, up from 1,105 in March.

"It was a pretty good pop," LePage said. Despite the strong month-to-month showing, sales were down 28 percent from April 2007, making last month the second-slowest-selling April in DataQuick's records, which go back to 1988. Only April 1995 had fewer sales, with 1,426. LePage agreed that bargain hunters are probably responsible for sending the monthly sales up so much from March to April.

"The overwhelming trend across the state is markets that have seen the biggest price declines are now posting some of the biggest sales increases," he said.

In the nine-county Bay Area, for example, sales of existing single-family houses fell in most counties compared with April 2007, but rose 8 percent in Contra Costa and 5.3 percent in Solano, two counties in the region that have been hit hardest by foreclosures. Median house prices were down 38.4 percent in Contra Costa last month from April 2007, and down 24.9 percent in Solano.

DataQuick also reported that a quarter of all home sales in the Bay Area last month were of properties that had been foreclosed upon sometime in the past 12 months. In Santa Clara County, such sales made up 14.4 percent of transactions. San Francisco had the lowest portion of foreclosure resales among Bay Area counties, with 5.9 percent. Solano County was most affected; 54.2 percent of transactions there were foreclosure resales.

In those deals, the seller is typically the bank or financial institution that foreclosed on the previous owners. A bank, already taking a financial loss and eager to unload its ballooning foreclosure inventory, is likely to list its property at a lower price than the "regular" seller down the street, who may not be desperate to sell. When the bank-owned property sells, it sets a new benchmark for both institutional and "regular" sellers.

Martz said he is listing an East San Jose home that the owner tried to sell months ago for $480,000. But perhaps 80 percent of the other homes for sale in the neighborhood are bank-owned properties or "short sales." In short sales, owners must seek their lender's approval to sell for less than they owe on their loans. Prices in this owner's area are dropping. "He had to go down to $350,000; that's what the neighborhood is doing," Martz said.

While prices have come down hard in places plagued by foreclosures, such as the East Side and Gilroy, declines have been less steep across much of the county. And it's still a competitive hunt for homes in popular school districts like Cupertino, Saratoga, Los Altos and Palo Alto, with price declines barely an issue.

Peter Congistre spent about eight months looking at houses in Willow Glen, the Rose Garden and near Santa Clara University before signing a contract a few weeks ago to buy a three-bedroom house in the Rose Garden.

"The homes you find that look like a really good deal for a low price, they happen to be in not an ideal area - there's a business in back or it's backed up to a duplex or an apartment complex," he said. Prices for "a nice home in a nice area" have certainly come down from their peaks, he said, but if some people think they can pick up a great home for $500,000, he said, it's "not in this area." One perk for buyers now, he added, is that "there are just a lot of places to look at out there. It's nice."

This week, there are nearly 7,500 houses and condominiums for sale in Santa Clara County, according to the local multiple listing service.

DataQuick said median prices for new homes in Santa Clara County dropped 24 percent last month from a year earlier, to $505,000. The figure measures sale prices of both new houses and new condos, LePage said, and could have fallen that much based on a changing mix of homes sold.

Vickie Nyland, president of home builder Taylor Morrison's Bay Area division, said new home prices are definitely falling in the South Bay. "We have to move our inventory through," she said. For example, at one of the company's townhouse developments in San Jose, "We've got three-bedroom homes . . . in the $450,000s," she said.

"A year ago we might not have had anything for sale in Santa Clara County under $505,000," the median new-home price in April.

DataQuick said its data shows that foreclosure activity remains at record levels in the Bay Area and financing with adjustable-rate mortgages is at a six-year low. It said investors appear to be returning to the market, as non-owner occupied buying is increasing.

To get to the Bay Area's home of the future, you've got to get past the current housing slump. But builders and developers are thinking past the desperate-sounding incentives of cars, vacations and price cuts. "We can't keep building the houses we've been building," says San Ramon architect Robert Lee, whose firm has planned many Bay Area residential communities.

"Does a family with two kids really need a 3,200-square-foot home?" asks Vickie Nyland, president of developer Taylor Morrison's Northern California Division, also based in San Ramon. "I think nesting is what our culture is going through now."

So look for these in the next few years: smaller single-family houses, as compact as 1,500 square feet, clustered around village-style greenspaces; infill housing that revitalizes old commercial and industrial space in cities and suburbs; modernist styles for young singles and couples who want the urban buzz of "Seinfeld" and "Sex and the City." Expect to find more ecologically friendly homes with tankless water heaters, built-in solar panels and water-saving drip irrigation. Say goodbye to "volume" ceilings and media niches.

It's not all in the future. There are examples on the market right now, from the Sendera complex between Galindo Creek and the walking trail in Concord, to Bayport at the former Alameda Naval Air Station, to the Cannery Lofts in Oakland — with bike storage and a common space where all the residents can wash their dogs. Warmington Homes' Vantage development in Palo Alto has solar panels already built in.

Here's what's coming, and in some cases, ready now:

Upgrades for home electronics
Designers are wiring houses for computer use everywhere. And with flat-screen TVs, every room can be a media room. The "new house of tomorrow" set to open at Disneyland will feature a digital lifestyle that's already available. According to one source, you'll be able to walk in the door after work, shout out a song title, and hear the music before you can open the refrigerator and grab a beer.

Condos with homelike and neighborhood features
Oakland's Pacific Cannery Lofts include areas equipped for residents to wash their dogs and secure bicycle storage in a "bike lounge." Due soon is a cafe and gallery featuring work by local artists and gourmet Blue Bottle coffee.

O'Brien Homes
Buyers are more concerned about "sustainability" to cut heating and cooling costs, water and electricity use. But builders say they're not always willing to pay for green features. (For ideas, and Bay Area builders, check out www.BuildItGreen.org.)

Multigeneration houses
Builders are designing not just in-law apartments, but communal and private space for grandparents and extended families.

Garages in the back, not the front
Builders call it "private lane" access for parking, not back alleys. But the result is the same, shifting cars and driveways. "Nobody wants to look at garages," says one building executive.

Fewer cookie-cutter developments
"Builders are looking for more diversity, an eclectic blend of styles" to give buyers some semblance of individuality, says Cheryl O'Connor, vice president of sales and marketing for Warmington Homes' Northern California division and chairwoman of the Northern California Home Builders Association.

Single-family home and condominium exterior design is slower to change. Most are still vaguely Mediterranean, with developers touting variations as "Spanish colonial" or "California mission" style. It's as if residential architecture hadn't moved forward since the stucco-and-tile houses of the 1920s.

But new, clustered bungalows are reviving craftsman style, making 1,500-square-foot houses look cozy rather than skimpy. The idea is to re-create something such as a traditional Berkeley neighborhood on a smaller scale. So far there are livable examples in Davis and in the Northwest, created by the aptly named Cottage Company of architects in Seattle.

The modernist revival is taking hold at Vantage and new projects in Walnut Creek, including the Mercer condominiums near the Lesher Center for the Arts and two other developments on Ygnacio Valley Road not far from the Walnut Creek BART station.

The midcentury modern look is spurred by young singles and couples who want to escape suburban style if not suburban life. It's also touted by magazines such as the hot-selling dwell, which describes itself as "at home in the modern world."

You'll find these new homes, condos and "duets" (duplexes with only the garages attached) in new locations.

"You're running out of these vast troves of land," says Nyland, of Taylor Morrison. "There aren't a lot of these Windemeres and Gale Ranches." Instead of those sprawling subdivisions, many developers are building on smaller, infill sites, sometimes replacing or revamping vacant commercial and industrial uses.

Among these projects is Sendera by Taylor Woodrow, just off Concord's Monument Boulevard. "We've been able to get 76 homes on a 7-acre site without it feeling too clustered or thickly built," Nyland says. It's a surprisingly expansive development — Mediterranean-style — at the end of an otherwise nondescript street, Systron Drive, beyond the elevated BART tracks.

The first resident to move into Sendera, retired Berkeley police officer Jim Hammett, wasn't sure how to find it at first, but now he enjoys the central location — he can walk to the Concord BART station. "I never thought I'd leave Martinez," Hammett says. "I don't know too many areas in Concord that I'd say 'yes' to." Among the pleasures he finds at Sendera: It's away from major streets, tucked in between Galindo Creek and the walking trail.

"I think we'll continue to see improvements in how to create really livable communities of higher density," says Robert Freed, president of Palo Alto-based SummerHill homes. "We operate more in the urban core areas of the Bay Area. Most of what is going to be developed in the future is higher-density, attached housing, but I expect higher levels of architectural style." He says younger buyers are moving toward "harder-edge urban design."

"Because land prices are so high, there's definitely a trend toward smaller lots and higher density with shared outdoor space," says O'Connor, the Warmington Homes vice president.

"Generation X and Y are also a big factor in our thinking," she says. "It's a changing demographic. They're not so much into having a big house on a big lot. And with the price of gas, they want something they don't have to drive far to get to."

What about not driving at all? "Transit village" is the new buzzword in multiunit housing, although, of course, every village was initially a transit village, reached by horse or boat or on foot. Now it usually describes apartment and condo clusters around BART stations.

They're already in place at Fruitvale, El Cerrito Del Norte and South San Francisco stations, among others. The garage at the Pleasant Hill BART station is being expanded so the current parking lots can be filled with 549 residential units, 10 live-work units and retail and office space. A kiosk near the station's ticket machines shows an architect's rendering of multistory structures with arched entries, square towers and diagonal, decorative roof supports. The promotional text says it's "reminiscent of Northern California's Spanish Colonial buildings."

In Walnut Creek there are plans for up to 599 apartments at the BART station. Condominium projects under construction within walking distance of the station are strikingly modern. One with the moniker "55YVR" boasts a "skylounge," a roof deck with a fireplace, canopies that look like sails, and a 360-degree panoramic view.

Another at 235 Ygnacio Valley Road, across the street from the BART station, is a five-story, 11-unit condominium project with a towering, slanting wall and roof panels. "People are going to either love it or hate it," Mayor Gwen Regalia said as the City Council approved the design in January. She's happy to see fresh residential design in Walnut Creek. "I'm getting a little tired of the Mediterranean castle architecture."

Reach Robert Taylor at 925-977-8428 or rtaylor@bayarea newsgroup.com.

New home ownership kindles enthusiasm and excitement as a buyer prepares to move into a recently completed home. It’s easy to anticipate the enjoyment of the pristine elements – new appliances, gleaming floors and counters, freshly painted walls and trim.

But, for many new home buyers in 2008, across the Bay Area and into the Central Valley, there will be additional excitement about features that are not so visible – but very important to the operation and enjoyment of the new home.

Green features – from energy-saving insulation and modern heating and cooling systems to paints and finishes that emit fewer gases and fumes – are becoming standard in an increasing number of new home communities. Along with tankless water heaters and, in some cases, solar panels, builders throughout Northern California are taking robust strides toward moving the housing industry to the forefront of energy conservation and smart building practices.

“Green building is all about ‘building a home right,’” noted Katie Ramp, an independent green consultant who is involved in the homebuilding industry. It goes beyond adding energy-efficient features to a home, focusing as well on jobsite recycling practices to reduce the amount of waste during construction. It also means landscaping that utilizes native plants, which require less water.

“Many green features are things you can’t see in a home,” added Ramp, from use of wood from sustainable forests as well as engineered wood, to better insulation and non-toxic paints. “You can’t see toxics from paints or carpets or adhesives, but they can harm you,” she said. Many builders are steering away from toxic materials, all for the benefit of the buyers.

Beyond a safer environment, homeowners will enjoy having a home, which is low maintenance as well as durable. Imagine the resale value of a home in a few years, which is so much “smarter” or “safer” than older homes, said Ramp.

Home builders association steps forward
Earlier this year, the Home Builders Association of Northern California (HBANC), which counts 100 home builders among its 1,000 members, unveiled an ambitious goal; reduce overall energy consumption in all new homes by 50 percent from 1990 levels by the year 2020 and reduce carbon emissions by 30 percent from 1990 levels in the same time frame.

Partnering with Build It Green, an independent organization that has created a Green Point Rated program, HBANC is setting the bar for homebuilding practices throughout the region. Promoting a variety of eco-friendly building practices, Build It Green’s rating system gives point values to various green practices and features, so builders can select practices and materials, set a point-goal for a specific project, and then be judged or rated according to that point system.

Started in Berkeley in 2003, Build It Green has been working with cities and counties in the nine-county region, educating and informing their representatives of the need for building green as well as the benefits to everyone.

Of the partnership between HBANC and Build It Green, Joseph Perkin’s HBANC’s president, explained, “Build It Green’s program exceeds the state’s current standards for energy-efficient construction, is compatible with other national green building programs and is specifically tailored to Bay Area’s unique housing marketplace.”

“We are a unique area. Build It Green is Northern California-based and has lots of understanding about this area’s environmental needs,” added Cheryl O’Connor, 2008 Chair of HBANC. “They brought all the stakeholders together – builders, contractors and environmental experts.”

Brian Gitt, executive director of Build It Green, added, “Together, we can help the Bay Area and California reach the broader goals of dramatically reducing our energy consumption, lowering our carbon emissions and growing our clean tech economy.”

Next step: Educating home buyers
With about 15,000 new home permits expected to be issued in this region in 2008, and an additional 15,000 to 20,000 annually for the next several years, the HBANC/BIG program will positively impact thousands of home buyers.

That means builders need to educate these consumers on the green features – seen and unseen – and the value of integrating those features into homes – for advantages in environmental health as well as in energy savings.

“I want a healthier environment for my kids,” is a phrase consumers say when questioned about their desires in a new home, according to O’Connor, who is also vice president of sales for SummerHill Homes, based in Palo Alto. “People used to not attend to energy issues, but the tide has changed.”

Low VOC paints, better insulation and stronger air filters are all elements that are becoming standard in new homes, noted O’Connor. And with increased numbers of children with asthma, for example, many of these features make sense to new home buyers. (VOC is the acronym for volatile organic compounds that easily vaporize and can pollute the environment.)

“Green Home building is constantly evolving,” noted Tony Bosowski, Olson Company president. “It’s certainly not a fad, and the opportunities are constantly expanding. We are continually looking for new products and practices” to make homes more energy efficient and sustainable.

He added, “Buyers have the desire for these practices and products.”

Olson Company recently opened Village Walk, a San Lorenzo community of two-story townhomes, and Bosowski reports that buyers select the development because “they want to be close to work and play and are interested in a project that does reduce their carbon footprint.”

The builder focuses on infill developments, “and the green features are a logical extension” of making the homes appealing to these kinds of buyers. Photovoltaic cells have been installed on each unit and will directly reduce each home’s energy bill. In addition, the company has installed tankless water heaters, uses low VOC paints and performs sealed duct testing and participates in the LEED certification system (a program that follows U.S. Green Building Council standards). Village Walk is the second Olson development in California to use solar panels.

Warmington Homes, currently selling units in its Palo Alto community of Vantage, also includes photovoltaic panels to produce solar energy, plus tankless water heaters. The builder has also begun offering monthly seminars to educate consumers about the benefits of green building, according to Mark Rowson, division president.

To help consumers feel more comfortable with these features, Warmington is updating their homeowners’ manuals to include information about the benefits and operation of these energy-efficient elements. Each unit has its own meter to show the amount of power being generated, for example, and consumers can learn how to read and interpret that information.

Coming soon, Warmington’s Grand Marina in Alameda – a collection of 44 single-family units due to be ready by the fourth quarter of 2008 – will be constructed with engineered wood, recycled fylash components in concrete and formaldehyde-free insulation and wood products, all benefits that will help the homes earn a high LEED rating.

Rowson noted that lighting controls and Energy Star appliances will become standard in “all of our projects going forward.”

He added, “Warmington is pushing hard to educate buyers and to integrate these features in the future.” He believes tankless water heaters and dual-flush toilets will eventually become standard in new-home construction, particularly in California. We’re probably among the top states in addressing this need (for energy-efficient components).”

Home shoppers will also find a solar component on homes at Oliveta, Centex’s new development in San Ramon’s Windermere area. The nearly 100 detached homes also have tankless water heaters and upgraded insulation.

“Buyers are starting to become more knowledgeable” about energy-savings features, noted Brian Kennedy, Centex product development manager. “A lot of consumers that visit Oliveta already know about the value of these features.”

Katia Kamanger, senior vice president with SummerHill Homes, noted that the company formed a Green Building Task Force to formalize a policy and outline techniques that would help the builder set and meet energy goals as well as building code requirements now being formulated by cities, counties and the state.

A current SummerHill project, Park Wood in San Jose, is getting lots of consumer interest. The builder uses engineered lumber “as much as possible,” with the result that there’s up to 50 percent savings in use of wood fiber, Kamanger said. They are also focusing on “tight building practices” to assure that ducts, windows and insulation provide the optimum energy savings. “We do a blower test on each home to determine if there are any leaks,” she said. The company also uses low-VOC paint, hot water recirculation systems, Energy Star-rated dishwashers and programmable heating systems.

On the outside of the homes, the company carefully maps out water-efficient landscaping, grouping plants with similar water requirements together for the best savings of water. They also limit use of grass throughout the development of over 200 homes and condominiums.

Consumers are interest in smart energy and environmental practices, said Kamanger. “I’m finding that many of these features that we’ve explained to focus groups (are appreciated by consumers). They say they want to protect the environment but can’t always articulate what that means.”

Among ways SummerHill is helping educate consumers is by training its sales force to explain the benefits of green building practices and features. The company is also preparing a glossary of environmental terms and features.

As HBANC and its member builders continue to add more sustainable building elements and keep a focus on energy savings, customers will benefit. Today’s homes are becoming more luxurious but more efficient, making them more appealing than ever. And the more informed buyers are about green home features, the more they’ll come to expect builders to provide such sensible and responsible innovations.

Home construction on the Peninsula has taken on new proportions as several-acre projects — and in one case, the top floor of a shopping center — are being developed as ready-made communities. Today, potential buyers have options ranging from a $500,000 loft to a $2.1 million single-family home, with many choices in between.

Morgan Lane, Menlo Park
Sonya and Galen Fletcher will soon close escrow on their home in Morgan Lane, a Taylor Morrison community of 56 houses situated in Menlo Park near Willow and Middlefield roads, a stone's throw from Sunset Magazine.

The Craftsman-style homes are configured in three models, two of which are available in either two or three stories. Choices range from 1,470 to 1,951 square feet, (3 to 4 bedrooms, 2.5 to 3.5 baths) with prices ranging from the low $1 millions to $1.399 million.

"We sold our house in Redwood City last year," Galen Fletcher said. "We rented for a year and looked aggressively to buy. We were really tired of losing out on multiple offers. Twice we came in second on fixer-uppers in San Carlos."
The Fletchers chose an open floor plan for their two-story, three-bedroom home with its see-through kitchen and great room.

"The basic package is very good, but we upgraded a few things," he said. "We added canned lighting, put marble in the master bathroom and hickory floors downstairs."

"We are sacrificing a big yard," Fletcher said. However, he feels that the trade off for their 3,000-square-foot lot is that "the community becomes the yard," citing the shared green area where their two young children can play and the proximity of nearby municipal resources.

Each home has a small patio area, and some homes have decks. Front porches are standard.

Vickie Nyland, president of Taylor Morrison, says that there was a real effort made to mesh with the existing neighborhood -- which translates to variation in elevations and rear-loaded garages, which enhance the entry.

"The neighbors thought that the street would be too wide," Nyland said. To answer this concern there will be new medians planted with red oaks and Chinese pistache.

Sales Manager Joyce Boury says that the homes will be sold in nine phases, six or seven offered at a time. As of mid-March, five of the 13 were still available. Eight are below market rate.

Lane Woods, Menlo Park
The first Lane Woods Homes will become available this spring. Located adjacent to the Sunset Magazine campus in Menlo Park, Lane Woods is a SummerHill Homes community of 32 single-family homes, including the 2008 Sunset Idea Home. The residences range from 1,719 to 2,998 square feet (3 to 4 bedrooms, 2.5 to 3.5 baths) and vary in price from $1.5 million to $2.1 million.

"It's a new neighborhood that looks like an old neighborhood. ... Over 100 trees were preserved," said Elaine Breeze, senior vice president of SummerHill.
Some model floor plans are available in several configurations so as to preserve the site. The neighborhood common area features a stand of redwoods.

"No garage doors face Willow Road and some of the front porches are the full length of the house," she said.

Breeze points out the strong horizontal design elements, which blend these new, two-story homes into the mostly ranch-style homes in the existing neighborhood. The signature split-rail fence surrounding Sunset will be extended -- complete with roses -- to front the new homes.

The basic package is already high end with such amenities as Wolf stainless-steel cooking appliances and Kohler bathroom sinks. In addition, owners can choose from a long list of custom options.

SummerHill homes will provide in-lieu fees for three of the five below market rate (BMR) homes. These fees will help fund approximately 22 BMR homes at a proposed Habitat for Humanity community in Menlo Park.

For John Suppes, founder and president of Clarum Homes in Palo Alto, building green is a passion. The 12, three-story, three-bedroom single-family homes at 996 Willow in Menlo Park, priced at $1.74 million, are all state-of-the-art, energy-efficient "Enviro-homes."

The Enviro-home is a prototype developed by Clarum. It is designed to reduce energy consumption by up to 90 percent by incorporating such features as on-demand water heaters, high-efficiency furnaces and appliances and radiant roof barriers. "We've exceeded Title 24 requirements by 30 percent or more," Suppes said.

On the long list of Enviro-home features is the computerized irrigation controller that is linked to real-time weather conditions -- no more instant sprinklers turning on during an unexpected rain storm.

Overall, the feeling is contemporary, with stainless-steel stair rails, brushed-nickel light fixtures, stainless-steel Bosch kitchen appliances and bamboo floors in the kitchen and great room. Nine-foot ceilings on the second and third floors add an open, airy feel to the 1,868-square-foot homes.

"There was no sense in putting in solar panels because there is so much shading on the site," Suppes said. "There's a common area with benches and lots of Heritage oak trees," he added. Front porches and decks are standard, as is the two-car garage.

Two of the homes are below market rate.

Cummings Park, East Palo Alto
"We're bringing urban lifestyle to the Peninsula," Sales Manager Anne Pearson said in describing Cummings Park. The 19 950-square-foot lofts and 12 1,155-square-foot townhouses are located on the third floor of the Ravenswood Shopping Center in East Palo Alto, next to Jamba Juice.

The homes are accessed via stairs behind a locked first-floor entrance, or elevator. The units open to a cobble-stoned common area. Parking is underground.

The townhouses have a kitchen, living and dining room and one-half bath downstairs and two master suites upstairs. The lofts have a similar downstairs floor plan, but feature an upstairs loft that overlooks the living room, plus a bedroom and bath.

At $500,000 to $600,000 these homes are the least expensive under construction nearby. However, the $400 monthly homeowners' fee is the highest (the others vary from $110 to $199.50).

"It's a hip, modern design," said Pearson, pointing out the 20-foot-high ceilings in the lofts and the stainless-steel stair railings. "Everything is standard," she added. This includes such amenities as GE Profile stainless-steel appliances, WiFi, slab granite in the kitchen and marble in the bathrooms.

So far six lofts and two townhouses have sold, including all of the six below-market-rate units.

Classics at Evandale, Mountain View
For Veronica and Jose Reginaldo, parents of three grown children, their new three-bedroom house in the Classics at Evandale community in Mountain View is their first experience with home ownership. They have lived in the area for 20 years.

"We didn't think we could afford it, but our eldest son helped," Veronica said.

Classics at Evandale is a 35-home community located on Evandale Avenue, near the intersections of Highways 101, 85 and 237. It consists mostly of single-family, 1,600-square-foot detached homes, with three bedrooms and three-and-a-half baths. Prices range from $789,000 to $809,000.

Each home has a side yard and front porch and a small front yard. The more expensive homes overlook the shared green area and also have wrap-around porches.

One bedroom is located on the first floor, next to the two-car garage. The second floor consists of a country kitchen with bay window, dining and living room and powder room. The master bedroom and bath plus another bedroom and bath are on the third floor.

Reginaldo says that she particularly enjoys the height of the home, and the fact that "it's full of windows. ... I can see the mountains."

To date, five homes are available, four of which are still under construction, so owners would have the option of choosing interior finishes from the design options. All of the below-market-rate homes have sold.

Jim Hammett, 64, was the first person to move into Taylor Morrison’s 76-unit Sendera development in Concord in November. His three-bedroom, two-and-a-half-bath, Plan 1 home was $597,000, but in a phone call from the builder he found out that prices dropped $50,000.

“I asked if that was going to include me because I was already in contract,” he said. “They said yes.”

But Taylor Morrison didn’t stop there. When Hammett couldn’t pay more than $3,000 a month, the builder kicked in money to lower his monthly mortgage payment from $3,800 to less than $2,500 a month.

“They really wanted me to buy out here and gave me what I wanted,” Hammett, a retired police officer, said.

Forget trips to Hawaii, luxury cars and 50-inch plasma screen televisions, now builders know the only incentives that work for buyers are cheaper homes and smaller monthly payments.

“For most, it’s payment-sensitive,” said Vickie Nyland, Taylor Morrison division president of the Bay Area. “In the core Bay Area market, they’re really buying a monthly payment.”

Cheryl O’Connor, vice president of sales and marketing for Warmington Homes in San Ramon, said that builders adjusted their prices to compete in markets now littered with bank-owned properties and resale homes.

“We’ve gotten rid of a lot of the gimmicky trips and stuff like that,” she said. “Now you will find most of the incentives are buying down the interest rate or help with closing costs.”

O’Connor said that in the last six months there would have been giveaways of $100,000 to $200,000 in upgrades, but now builders have responded to market conditions by releasing smaller phases and pricing accordingly. Now the incentives are about 10 percent or less of last year’s discounts,

O’Connor said that credits range from $5,000 to $10,000 for buyers in their Bayport Alameda development, a project with prices that range from the high $700,000s to the mid-$900,000s. She said most use the credits for a better interest rate or as credits for upgrades, although buyers can also use the credit for closing costs.

Greg Paquin, president of the Gregory Group, a real estate information and consulting company based in Folsom said in an attempt to be competitive, builders deflated original prices rather than give steep discounts.

“It’s an interesting move and I think you will see it a little bit more in areas hit a bit harder,” he said. “It’s not going to go down another $50,000. All the massive incentives; the trips, cars and all that, has pretty much gone away.”

KB Home announced in a January press release that the company would be practicing “price protection,” or a guarantee “that if the base price of their home at the time of closing is less than the original purchase price, KB Home will honor the lower price.” The Los Angeles-based company also said it would be creating a “rate lock” program where the builder covers the cost of locking in an interest rate until their custom home is built and ready to move in.

“It gives buyers a little more confidence in the market,” said KB Home Northern California and Northern Nevada spokesman Craig LeMessurier. “If the price goes down $5,000 to $10,000, we give them the price at close.”

LeMessurier said that communities in the Central Valley, like their four developments in Lathrop, are most affected by the falling prices, which is why he said KB Home was the first major builder to launch the two new programs.

“A few other builders jumped on the ship afterwards,” he said. “I’d say it hasn’t been a traffic driver, it’s really just more of an encouragement.”

Matt Koart, Pulte Homes‘ area president for Northern California in Pleasanton, said that incentives may not always be the best deal and buyers will gain more with builders who price homes correctly.

“The customer has to figure out the base price and weigh the alternatives,” he said.

He said that Pulte’s incentives range from discounted upgrades and premium lots to lowering interest rates catered to the individual rather than a general policy.

“Builders aren’t interested in making money on deposits,” said Jonathan Dienhart, director of Published Research at Hanley-Wood Market Intelligence in Costa Mesa. “But once the home is closed and the buyers have moved in, that’s where the deal ends. It’s just an incentive to stave off cancellations.”

O’Connor said that Warmington Homes does offer a price guarantee, so that if the developer adjusts pricing, the buyer will get the adjusted price. Also added are guaranteed rates with its affiliated company, Baypoint Mortgage.

She said that tougher markets, like East Contra Costa County, are reliant on the credit more so than those in the “core Bay Area.”

Les Lifter, regional vice president of marketing for Northern California and Nevada for Lennar, said that his company always used incentives based on closing, competition and inventory. “But there are better incentives in certain locations than others,” he said. “Eastern Contra Costa County has been much more competitive and challenging market.”