Developer hustles to sell in a down market

December 23, 1990|By Timothy J. Mullaney

Harry Rosenthal wants you to know this: It's harder to sel houses today, sure. But not impossible.

Mr. Rosenthal's Owings Mills-based Preakness Homes has made adjustments to keep things moving at its developments in Perry Hall and Catonsville, and so far they're working.

Though new-home sales throughout metropolitan Baltimore fell 35 percent during the third quarter, Preakness has sold 12 of the 37 homes it plans at Silver Hill Farm in Perry Hall since July, and has moved 44 town houses and single-family homes at Patapsco Falls North in Catonsville since late 1989.

Mr. Rosenthal, who owns Preakness jointly with partner Lou Breitenother, said Preakness has added a new home design and some marketing wrinkles to sell more single-family homes at Silver Hill Farm and Patapsco Falls North. Patapsco Falls North also offers town houses.

First of all, the company designed a new four-bedroom home that's smaller than Preakness' earlier models and can sell for less. The 1,850-square-foot home starts at $169,990 at the Catonsville development. The price is $10,000 below what had been the development's lowest price for four-bedroom homes, which had started at about 2,000 square feet.

"We figured we had to downsize for next year's market," Mr. Rosenthal said. "It's a great house. We've sold six or seven just off the plans," because Preakness hasn't built a model home based on the revised plan at either of the two communities.

In Perry Hall, the same house sells for $154,990. The Catonsville development has a model of the original, larger design. The single-family model at Perry Hall is based on a design that sells for $144,990, the least expensive house offered at Silver Hill Farm.

In addition to adding a new design to offer a more affordable house, Preakness has also added features to its marketing plans.

The company is courting real estate brokers, for example, in ways it hadn't courted them before, such as hosting breakfasts and open houses for brokers. Preakness hopes that move will attract potential buyers who might otherwise buy an existing home.

New-home builders like to avoid using Realtors because they have to pay Realtors a commission on the sale, adding to their expenses.

Realtors usually don't like to sell new homes because they can get higher commissions from selling an existing home. But the slow real estate market has pushed more brokers into pursuing new home sales, and has pushed builders into pursuing brokers.

"We're working harder for sales, but I don't think we're doing that much differently," Mr. Rosenthal said. "People are definitely shopping around more, but the bottom line is, we keep plugging away at value."

Mr. Rosenthal doesn't quite buy the popular notion that his is a man-bites-dog story, given the current state of the housing market.

"I see this market being stronger than other people see it," said Mr. Rosenthal. "Fixed 30-year mortgages are around 9 percent now. That's why the market's still here. The fact that we stress value and develop our own land is a key ingredient, too."

Developing its own land helps Preakness squeeze out the profit margin builders have to pay to developers, who take care of things such as building roads and sewer lines before selling lots to homebuilders.

Patapsco Falls North offers three-bedroom, two-bath town houses with three finished levels from just under $130,000, said David Cahill, Preakness' sales and marketing director for both communities. Some of those homes are almost 2,000 square feet, he said. "That's a lot for $130,000," he said.

The single-family homes start at about $160,000 for the downsized four-bedroom, 2 1/2 -bath house and $169,900 for the original, bigger design. In addition, a three-bedroom model is offered for prices beginning at $159,990.

At Silver Hill Farm, the same three-bedroom, two-bath home starts at $144,990, Mr. Cahill said, but the average price of units ,, sold range between $150,000 and $160,000.

Most of the single-family models are available at both developments, Mr. Rosenthal said, though one luxurious model is offered only in Catonsville.

Preakness doesn't sell town houses at Silver Hill Farm, but Pulte Home Corp. sells town houses adjacent to Preakness' development on land Mr. Rosenthal and Mr. Breitenother sold to Pulte.

Pulte's community, also called Silver Hill Farm, has prices beginning at under $106,900.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.