Low interest rates
prompt home buyers
to shell out for upgrades

By Lyn Danninger

It's been widely reported that bargain mortgage rates are spurring homebuyers to snap up Hawaii real estate in record time. But developers such as Castle & Cooke, Schuler Homes, Gentry Homes and Haseko are reaping gains apart from the high sales volume.

Lisa Souza, design center manager for Castle & Cooke Homes Hawaii, displays the cornucopia of Corian buyers can choose for upgrades when buying a new home.

Buoyed with additional money to spend, buyers are requesting an array of design options offered by developers on their new homes.

Many of the options will be on display in this year's crop of model homes competing in the Building Industry Association's Parade of Homes Oct. 12-13 and 19-20.

The developers say it represents good additional business for them and because many of the options can be paid for over the life of the mortgage, buyers seem to have decided "why wait?"

"It's a profit center for us, but at the same time, interest rates are really helping people afford it," said Schuler Homes President Mike Jones.

Moreover, it may be cheaper for the buyer to add options up front while the house is still under construction and more easily accessible, said Donna Tomita, Castle & Cooke's director of marketing.

"They realize it's worth putting the money into the home now," she said.

To meet the demand, developers have been expanding product offerings and also opening their own design centers.

One of the most popular choices buyers request is wooden flooring -- using Pergo-type laminates, bamboo or hardwood -- rather than the traditional carpet, said Lisa Souza, Castle & Cooke's design center manager.

While costs of flooring vary depending on the product used, an entry way or kitchen could cost as little as $700. The entire house could cost as much as $20,000, she said.

Stainless steel appliances are also high on many people's lists, but black appliances turned out to be an unexpectedly popular choice, catching appliance distributors by surprise, she said.

"Stainless steel is very popular but appliance distributors didn't think the black appliances would be as popular," she said.

Many people are opting for a range of counter tops, including popular Corian-type surfaces, she said.

While Castle & Cooke standard options include a wide range of General Electric appliances at its projects, people are also opting for other, gourmet-type appliances.

Reconfiguration of the floor plan to accommodate a particular family's needs is also a popular option, Souza said. Some people want an extra bedroom in lieu of a larger square footage in a family room. Others are opting to extended the lanai.

To see what upgrades cost over time, take the example of $30,000 worth added to a typical $430,000 Castle & Cooke single family at its Heritage at Lehiwa Ridge project. The custom work would add about $157 per month to the mortgage, said Castle & Cooke Homes loan officer Rusty Rasmussen. The figure is based on a 10 percent downpayment and mortgage rate of 5.75 percent. The cost of the basic mortgage before the upgrades are added to the loan would $2,595. The upgrade package would include an additional 313 square feet of living space, laminate flooring in the downstairs area of the house and corian counter tops in the kitchen.

Buyers can choose either an open, vaulted ceiling or a bonus room like this upstairs in Castle & Cooke homes at Heritage on Lehiwa Ridge in Mililani Mauka.

On the mainland, huge developer and builder design centers offer every conceivable kind of option for new homes and have become increasingly popular with buyers, she said.

"Some even go so far as offering matching bedspreads, or couches to match drapes," she said.

That may not happen in Hawaii, but Souza said she expects the product range and types of services to grow as buyers come to expect more options with new homes.

"Builders are expanding their option programs to meet the expectations and desires of their buyers," said Rick Hobson, sales and marketing director for Gentry Homes.

Hobson believes the trend is leading to a continual upgrading in the quality of the homes being sold. "The bar has been raised to semi-custom status for finished detail and design in the quality of your average new production home," he said.

Parade of Homes

Sneak a peek at Hawaii's newest homes and residential developments.

When: Oct. 12-13 and 19-20, from 10 a.m. to 5 p.m.

How: The Official 2002 Parade of Homes Guidebbok is available at all Bank of Hawaii branches and in Wednesday's MidWeek


E-mail to Business Editor


Text Site Directory:
[News] [Business] [Features] [Sports] [Editorial] [Do It Electric!]
[Classified Ads] [Search] [Subscribe] [Info] [Letter to Editor]
© 2002 Honolulu Star-Bulletin --