Homebuilding looking up

originally appeared in Zacks Equity Research:

KB Home, one of the leading homebuilding companies in the U.S., recently acquired lands for 100 luxury homes in the sought after community of Playa Vista in Westside, Los Angeles. The construction of homes will start in spring.

The company intends to build three story detached homes of 2,800 square feet. The homes will have four bedrooms and three and half baths. The company also intends to build single floor condominium homes of 2,000 square feet with private elevator access for each home.

For simple or more complex bathroom remolding projects, consider an outstanding grand rapids bathroom remodeling company that does quick, professional work.

Owing to its operational business model KBnxt, KB Home always begins construction only after a purchase agreement is executed. As such, the consumers buying KB homes in Playa Vista will get the liberty to plan their homes according to their preference.

This process also helps the company turn over its inventory more quickly than its peers, thereby supplying capital for reinvestment. In the long run, this reduces the risk of unsold inventory leading to higher returns on invested capital.

Playa Vista is one of the most sought after luxurious communities in Westside, Los Angeles. The acquisition of land in Los Angeles’ Westside is in line with KB Home’s strategic shift in its geographic footprint. The focus is to place the communities in highly desirable land-constrained submarkets that enable it to sell larger, higher-priced homes, thus driving a strong increase in average selling price.

The rising demand for new homes has led to a favorable situation in the housing market, where inventory levels are dropping and prices are moving up. The demand has been particularly strong for luxury homes. Toll Brothers, Inc., another leading luxury homebuilder in the US, has been witnessing strong overall growth over the past few quarters.

Therefore, building adequate number of new homes is necessary in order to maintain the required level of inventory to meet the growing demand for homes. Acquiring lots and lands in the Playa Vista community will help the company to capitalize on the increasing housing demand.

With housing market recovery gaining momentum, KB Home believes its strategic initiatives including overhead reduction, margin expansion, and land investments in higher-priced, better-located communities; and increasing backlog will help it achieve profitability in the upcoming quarters. Though we have faith in KB Home’s strategic initiatives, we believe that it may take time to achieve sustainable profitability as the housing market recovery process is erratic and uneven.

We currently have a Neutral recommendation on KB Home. The stock carries a Zacks #3 Rank (a short-term Hold rating).

Creating a Wonderful Master Bedroom And Bath

Enlisting the help of a professional could be a saving grace

To shorten their extremely long commute, many Americans are moving out of the suburbs and into the city. However, this also means trading in a brand-new, spacious dig for a 100-year-old row house that needed lots of work.

To save money, the many intrepid couples decided to don safety glasses and sledgehammers and do it themselves. But after a certain length of time goes by, couples have realized they have bitten off more than they can chew. Their houses are still in shambles, and they often run out of money, ideas and patience.

Many couples often grow weary, and consider abandoning their projects. However, if they can afford to hire a professional to finish their kitchen remodel, for instance, the couples' sanity can be saved. Couples also might want to consider simplifying their projects, like purchasing a bath enclosure rather than completely redoing a bathroom.

Here is a professional's account of a typical couple who has enlisted help:

The couple wanted their third-floor bedroom to be an open space with a bright, airy loft feeling. They had gutted it with that in mind, but the shell of a room lay unfinished in a heap of dust and debris. So the first order of the day was drywall -- a lot of drywall. I created walls and ceilings, and lay down a sub-floor covered with beautiful dark vinyl that has the look of wood.

Once the basics were in place, I chose a color palette for the space. When searching around for inspiration, I found a box labeled "Barb's favorite fabrics." In it, I discovered a gorgeous sage-and-gold cloth that gave me the jumping-off point I needed for the paint, fabrics and tiles.

I then got busy dividing the loft into two zones: a bedroom and a bathroom. I separated the two areas with a wall of closets that provide storage, privacy and soundproofing. In addition, I closed off the smaller entrance to the bathroom with a series of woven panels on a track system that will slide across the space when privacy is needed.

In the bedroom, I put in a king-sized bed with a chocolate-brown upholstered headboard.

For added warmth and ambience, I put in gorgeous linens and throw pillows in a variety of textures and colors. And, for a touch of romance, I installed a beautiful crystal chandelier above the bed.

In the bathroom, I created a little closed-off space for the toilet, but left the rest of the space open.

In this open area, I installed a gorgeous old-style tub with cast-iron feet (after I reinforced the floor to accommodate this 700-pound beauty); a glass-enclosed shower, complete with solid white quartz walls and a feature wall in a beautiful green rippled tile; and a stylish vanity with a quartz countertop, a stunning sink in a gold-and-green paisley pattern, a mirror and two sconces.

After adding a variety of accents and accessories, this third-floor bed and bath were complete. With some high-end fixtures and finishes, a mixture of textures and colors and creative planning, Barb and Evan got the loft space they desired.

Now, with their bedroom-renovation woes behind them, the couple can finally get a good night's sleep -- and start dreaming about finishing the other rooms in their house. How divine!

Teardowns Have Foes, But They Can Revitalize The Block

The first part of Mark and Constance Eddy's home-ownership story is classic: In 1998, the newlyweds bought a starter home in a post-World War II subdivision in Prairie Village, Kan.
Advertisement

The 900-square-foot, two-bedroom, one-bath house was dated, with 1950s metal cabinets and gold-flecked Formica counters in the kitchen, but cozy.

"It was all we needed," Mark Eddy said.

What really sold the couple on the home was the street. Prairie Lane is a winding street of tiny houses nestled close together under a canopy of large trees. The neighborhood is next to the Prairie Village Shops, which contains an urban mix of businesses -- gas station, hardware store, drugstore and diner, as well as upscale restaurants and boutiques.

"People live in their front yards. There's a mix of ages -- some neighbors are like grandparents to the children on the street. It really has a sense of community," Eddy said.

Seven years later, the couple had two small children and a third on the way. It was time to trade up. So the Eddys sold the house on Prairie Lane and bought a 1,900-square-foot ranch on a big lot in Leawood, Kan. They were living the American dream.

But in a 21st-Century twist to the tale, the Eddys were unhappy in the "better" neighborhood. The street was usually deserted and quiet, except for the distant hum of traffic on Interstate 435.

"We immediately missed the neighbors, and we missed walking to the shops," Mark Eddy said. Two years later, when the house next door to their first home came up for sale, the Eddys decided to buy it, tear it down and build a new house on Prairie Lane big enough for their family to grow into.

At 3,400 square feet, the Eddys' new home towers over its neighbors on Prairie Lane. The home is in compliance with city requirements for setback from the street, setbacks from the sides of the property, height and footprint on the lot. But shortly after groundbreaking, the Prairie Village Homes Association took the Eddys to court, claiming the proposed house design was in violation of deed restrictions that limited to homes to "1 1/2 " stories. The judge eventually ruled in favor of the Eddys.

Mark Eddy, co-owner of Gahagan-Eddy Building Co., says he talked with many neighbors on the street and showed them his house plans to try to gain their approval before moving ahead with the home teardown. A majority of homeowners on his street signed a petition in favor of allowing the house.

Bill Chinnery on the homes association board of directors says he thinks the chocolate-brown exterior paint and two tall trees on the lot help the house blend into the neighborhood in summer. But in winter he thinks the house sticks out too much.

"I like the house, but it's too big for the neighborhood," Chinnery said.

Jessamine Guislain, who has lived on the street since 1965, disagrees.

"It's a beautiful house, and I enjoy looking at it," Guislain said. "I'm happy to see a family who loved Prairie Lane able to move back to it."

Guislain said allowing home teardowns and home renovations on the street helps keep the community intact. "In my own experience with a house next door to me, every family who lived there, once they had their second child, moved."

Eddy says most of his neighbors have been supportive, but he acknowledges others think the house is too big. "I respectfully disagree. If a house is beautiful, I don't care if it's twice the size of the one next to it. It should only be a problem if it's ugly."

Prairie Village recently adopted an ordinance to notify homes associations of permit requests within their neighborhoods, says assistant city administrator Dennis Enslinger.

"Everybody has their own expectation of what the neighborhood is and what it should become, and the city is trying to balance those interests for everybody involved. But it is an ever-changing balance," Enslinger said.

Cydney Millstein, owner of Architectural & Historical Research LLC in Kansas City, says preserving historic neighborhoods is important, but it doesn't mean everything has to stay the same.

"If new designs are done tastefully with a tip of the hat to what was going on historically, that's OK. If it's bringing life back to a neighborhood that became kind of stale after a while, this is a good way to inject vitality back into the neighborhood."

By: Cindy Hoedel; McClatchy Newspapers
Detroit Free Press; August 17, 2008