Royce Homes Ranked 58 The nationwide median selling price for new homes topped $200,000 for the first time in 2004. That price is where “affordable” housing begins in many markets. But in Houston, builders selling homes above $133,000 get hit with impact fees, which explains why 48 percent of the units Royce Homes closed in that market in 2004 sold for under that price.
Nearly one quarter of the 1,605 homes that Royce closed in Houston, Dallas, Atlanta, and Phoenix were “affordable,” according to company figures. One of its communities in Southwest Houston sold 37 garden homes, priced at $127,500, in two weeks. Jeremy Liardon, Royce’s chief information officer, says profit on affordable housing hinges on getting consistent costs for floor plans.
First-time buyers, who aren’t always ready for what they are getting into, are primary customers for affordable homes. These buyers get help from a customer service program called Home Star that Royce launched in January 2003. The centerpiece of that program is its 24-hour call center that, says Liardon, “gives our customers the confidence that we are going to take care of them before, during, and after the sale.”
DOLLAR DAYS Home price appreciation began to slow during 2004’s fourth quarter, according to the Home Price Index compiled by the Office of Federal Housing Enterprise Oversight. But the annual rate of increase—11.17 percent—still ranked 2004 among the top years for appreciation. Those gains buoyed builders’ margins, with 47 reporting increases in their gross margins and 51 reporting gains in net margin.
Learn more about markets featured in this article: Houston, TX.
