Oh, for the days when San Antonio's luxury home builders offered such amenities as 40-foot waterfalls and rooms that rotated in homes that didn't yet have buyers.
Today, in a market glutted with million-dollar properties, many high-end custom home builders are trading down to remodeling jobs, small commercial work and a slightly more affordable product: the half-million-dollar home.
Something few builders are doing: putting an empty million-dollar home on the market in hopes of finding a buyer.
“People are doing whatever it takes to survive and pay the bills and create a bridge to when things are better,” said Jack Inselmann, vice president of the U.S. Central Division of housing research company Metrostudy. “It's been a difficult, challenging year.”
Custom builders have been hurt by an abundance of inventory — more than four years of it available in the resale market for million-dollar homes — and the difficulties buyers face trying to get a jumbo mortgage. Prospective luxury buyers are exactly the people who lost the most money in the stock market collapse last year, too.
As a result, the owners of these family businesses known for showy houses have had to get creative.
Jack Uptmore of Uptmore Custom Homes usually participates in the annual Parade of Homes and has built plenty of million-dollar-plus properties.
But he has focused more of his business on building in the $200,000-to-$500,000 market. And in the past year, he's done a muffler shop, pool houses and remodeling work — “any project that creates cash flow,” he said. “I know other builders that have gone into real estate brokerage.”
Adam Sanchez of Diamante Custom Homes sold his last spec home in 2007, and has gone the past two years without building anything before he has a client under contract. As the luxury market has slowed, commercial construction work has grown from 10 percent of his business to about 30 percent.
“We've had to scramble around a little bit just like everybody else,” Sanchez said.
A few years ago, clients would add expensive granite countertops or custom lighting systems to every part of a home without thinking. Today, Sanchez said, that's not the case.
Kyle Lindsey of Kyle Lindsey Custom Homes passed on participating in the Parade of Homes earlier this year, due in part to the fact that his 2008 Parade entry in Cibolo Canyons still is on the market.
“I'll be glad when that person comes through who has the money to back it up,” he said.
Builders say holding a luxury home can cost between $4,000 and $6,000 a month in interest payments.
But Lindsey considers himself one of the fortunate custom builders. He said he has only one such property for sale and has enough work to keep busy through 2010.
“I think that was part of the key to survival,” he said. “I didn't have that inventory on the ground or that monthly overhead expense of upkeep or making those interest payments.”
Don Craighead of Don Craighead Homes has a $1.6 million house and a $1.1 million house on the market in Cibolo Canyons.
He said his father, who used to be in the building business with him, told him that difficult times make him a better person.
“I said, ‘I don't think so,'” Craighead said. “I don't need quite this much stress.”
But with the stock market up, luxury builders say they hope the worst has passed.
