Builder bets against market with Gilbert project

GILBERT — An award-winning Valley homebuilder is moving ahead with plans for a subdivision of luxury homes despite an abysmal real estate scene and reports that show plummeting sales for homes worth $500,000 or more.

Cachet Homes is building Carrara Estates near the southwest corner of Germann and Higley roads in Gilbert. Prices start in the high 500s, and the community offers homes with up to 5,055 square feet of living space and special features like game rooms and four-car garages.

But the timing is awful. Sales for resale homes have remained stagnant while sales of new homes in the same price range as Carrara Estates are down 49 percent over the past year, according to the Arizona Regional Multiple Listing Service.

“It has been a tough and extended housing market downturn,” says Diane Byrne, Cachet’s vice president of marketing. “Cachet has taken several steps during this period.”

The company was the first homebuilder in the Valley to hold a public auction, where 38 of its finished homes sold in about two hours, Byrne says. It also revamped its website to add better search features and photos of homes to help them sell more quickly.

The company also reduced the number of model homes, cut back on cleaning schedules and turned up thermostats. All new construction has been nearly halted with the exception of Carrara Estates and Paseo Lindo, a sister property in nearby Chandler.

And when many homebuilders were expanding in 2005, Cachet maintained a slow-but-steady pace of growth, Byrne says.

“It’s been pretty wicked the past 12 to 18 months,” Byrne says. “The election will get things back to a more normal place.”

Economic experts at the W.P. Carey School of Business at Arizona State University declined to speculate on whether Cachet’s brave plan made fiscal sense. However, senior associate dean Lee McPheters said in an email that homebuilders can still appeal to credit-crunched buyers if they’re smart.

“We are in an economic downtown, but people are still moving to Arizona,” McPheters wrote. “Ninety-five percent of people are still working, and 95 percent of Arizona homes are not in foreclosure.

“On the other hand,” he added, “many sectors of the economy (retail, construction, finance) are losing jobs and credit standards are now higher, so people may b reluctant or unable to enter into a long-term mortgage. Therefore, those builders with the best value (not necessarily cheapest, but most features per dollar), the best marketing, or the best brand (consumer image) will still have business.”

Cachet is headed in this direction with Carrara Estates, Byrne says.

“With a lot of production homes, you have to take it as it is,” she says. “We’re able to make minor adjustments, like enlarging rooms and turning a closet into a wine cellar – making a home truly unique.”

Cachet Homes has been recognized as the No. 1 homebuilder in Arizona twice by Arizona Business Magazine and as one of the top five homebuilders in Arizona since 2000.

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