Price-point diversity drives momentum at Lewis Construction
Lewis Construction sees strong demand for both affordable, custom homesJune 6th, 2013
Spokane homebuilder Tim Lewis, president and founder of Lewis Construction & Development Inc., says the ability to construct homes at multiple price points has carried his company through the recession and sputtering recovery.
Lewis, a former project manager with Spokane-based Lydig Construction Inc., started Lewis Construction in 2007 "right before the market went into the tank." The company not only adapted to market fluctuations to survive the recession, but today it's building more midpriced to upper-end custom homes and lower-priced entry-level homes than ever, he says.
Lewis Construction currently has eight homes under construction and four projects in the permitting phase. Nine more homes are in the design phase, and many more potential projects are in preliminary planning phases, Lewis says.
He estimates the company has three times as many projects under construction and five times as many in some form of planning as it did a year ago.
While he doesn't expect all potential projects to come through, Lewis says, "More people are talking about building now than were talking a few years ago. I can't complain about being busy."
About 70 percent of the company's current revenue comes through building custom homes for empty nesters and retirees, he says.
Custom homes are priced at $275,000 to $400,000, not including land costs, and typically have 1,800 square feet to 2,200 square feet of living space.
Most have three bedrooms, two baths, a zero-step entry, and a three- or four-car garage.
Almost all are craftsman-style single-level ranchers or ranchers with an unfinished basement. Some customers don't want a basement, but prefer to add bonus space over the garage. The bonus space provides 300 to 500 square feet of floor space for storage or an extra room at less than half the cost of a constructing a basement, Lewis says.
Most clients in the custom-home market come to Lewis Construction through referrals, he says. The company also actively markets through social media, Lewis says, noting that Facebook has one of the most popular search engines used by potential homebuyers.
Lewis meets with clients in the conference room at the company's office at 8225 N. Division, where, using design software and a large-screen display, he begins developing conceptual designs based on their preferences and budgets.
"We open the books on the budget and the project also is in live mode in terms of budget and design," he says. "We can deliver a custom home in four or five months."
Lewis, who has a degree in architecture, designs all of the floor plans for homes that the company constructs. He says he's trained in design and construction that emphasizes conserving resources and aging-in-place features.
The company is certified to meet Leadership in Energy & Environmental Design (LEED) and Energy Star industry and government standards for sustainability and energy efficiency. The company also is a member of Inland Northwest Built Green, a sustainability initiative of the Spokane Home Builders Association, he adds.
Lewis Construction has five permanent employees, and Lewis says the company likely will hire two additional employees within two months. The company works with 16 subcontractors and suppliers on each project, and each subcontractor has an onsite workforce of two to four people, he says.
"They need to build fast because they have so much to do," he says.
Lewis says he spends most of his time working with clients on designs and estimates, although he routinely visits each project site.
"You have to keep on top of quality control and meet with clients every step of the way," he says.
While much of his company's work is in the mid- to high-end markets, Lewis Construction hasn't left the lower-priced market behind.
A few years ago when the housing market plunged, Lewis Construction was able to stay afloat by designing lower-cost homes for the entry-level buyers, an industry niche he calls the affordable home market.
"Diversity was really important through the recession," Lewis says.
Homes that Lewis Construction builds for the affordable market usually are priced at under $200,000, including the lot.
When federal tax incentives were in effect for qualified homebuyers from 2008 through early 2010, the main homebuyer demand turned to the affordable market. After the credit expired, the pendulum swayed to the custom-home market.
"Now, with our diversity, everything is going," Lewis says. While most of Lewis Construction's revenue currently comes from the custom side, half of the homes it currently has under construction are aimed at the under $200,000 market.
Lewis Construction can construct affordable homes in 45 to 60 days, and those homes are selling before they're finished, Lewis says.
"We're able to build a new home in nearly the same time frame as it takes to close on the purchase of an existing home," he says.
Even in the affordable market, Lewis says he tries to design in elements of flair that buyers won't find in other homes in that price range.
Such elements include energy efficiency measures that are higher than industry standards, flooring upgrades, and stainless appliances.
Most of the affordable products have 1,200 to 1,400 square feet of living space.
Lewis says he's developed a new plan with nearly 2,000 square feet of living space and a four-car garage priced at under $200,000.
Lewis doesn't plan to specialize in one market price point over another.
"We want to serve clients from their first home to their last home," he says.
Lewis Construction builds its affordable market products in established subdivisions in the Spokane area. Its custom homes are at scattered sites, often preselected by the buyer, throughout the greater Spokane-Coeur d'Alene markets.