LETTERS HOME

Central Penn Business Journal, Oct 12, 2007 by Veronikis, Eric

DAUPHIN COUNTY

Builder holds the price line on houses

A Swatara Township home-building company sent a batch of letters to customers to let them know it plans to protect their property values.

Fine Line Homes President George Parmer told customers in the letters that the company will not slash prices to sell houses throughout a sluggish market period.

"The way the housing market is, the trend is to discount house prices to dump product," Parmer said of why the letters were sent. "We won't discount to reduce debt."

Fine Line has been in business for 35 years and weathered similar market conditions in the past, Parmer said.

The Dauphin County company does not have to drop prices to sell houses in a slower market because it has reinvested most of its profits back into itself to pay down debt, Parmer said.

When builders slash prices on new houses, similar houses bought for a higher price in a better market period decrease in value, Parmer said.

Other builders in Pennsylvania have been able to hold the line on prices, too, said Scott Elliott, director of communications for the Pennsylvania Builders Association. The states housing market has not been as volatile as it has been in other parts of the U.S., he said. But some companies still reduce prices to sell more homes.

"Some builders are dropping prices and offering incentives to buyers. But it depends on the various factors affecting each individual builder," Elliott said. "There's no one-size-fits-all response to todays housing marketplace."

Fine Line develops single- family and multi-family neighborhoods throughout Dauphin County.

Pamela Wevodau lives in Huntleigh, a Fine Line neighborhood in Lower Paxton Township. Wevodau bought her house in January and said Parmer's letter strengthened her faith in the company.

"IfI bought the home and six months later the market was crappy and they reduced prices, it would leave a bad taste in my mouth," Wevodau said. "I had a high respect level for the company, and this reiterates that."

Charter Homes and Neighborhoods has managed to offer consistent prices too, said Robert P. Bowman, president of the company.

The builder, based in M anheim Township, Lancaster County, did not increase prices when the market was hot a fewyears ago, Bowman said. When signs of a slowdown showed in 2006, the company was ready because it remained consistent, he said.

National builders slash prices and run when they have to please shareholders and Wall Street, Bowman said.

"We make sure we can offer as much value as we can," he said.

The housing industry is market driven, and that leaves a number of options open to builders, Elliott said. While Fine Line's approach is admirable, so are other strategies, he said.

"There's nothing wrong with a builder who decides to cut prices or offer incentives. That's the beauty of the free-market system," Elliott said. "The fact that different builders are taking different approaches illustrates the resiliency of the housing market and the dynamics of various market forces at work."

BY ERIC VERONIKIS

ericv@journalpub.com