Home & Garden

Q&A with Wade McGuinn, McGuinn Homes

The real estate industry bade good riddance to a miserable 2008, looking for a better year. But the suffering didn't end in 2009.

With a federal tax credit in place for many homeowners and historically low interest rates, industry experts are hopeful heading into 2010.

Most don't expect home sales and home building to return to the heyday they experienced in 2003 through 2007, when nearly anyone could get a loan regardless of income or credit history.

But they say they will be happy with a "new normal" that doesn't include plummeting sales numbers and home prices and scores of unemployed contractors.

Here's what some Midlands real estate experts had to say as 2009 draws to a close:

Wade McGuinn, Owner of Lexington's McGuinn Homes for 25 years

How has this difficult recession affected what people are buying?

The average sales price of the top 10 home builders in the Columbia area has come down $20,000 to $40,000 because they have redesigned their products to meet the changing needs of buyers, McGuinn said.

"People are buying smaller houses," he said. "People still like their walk-in showers, whirlpool tubs and granite countertops, but instead of 3,000 square feet, they're buying 2,250 square feet."

First-time buyers also are trading down to an average of 1,200 square feet, instead of the 1,600 square feet that was typical a couple of years ago.

He said "cottage" is the industry's new hot term.

"Moving forward, for a long time, you're going to see people being more conservative financially," he said.

How has home building changed?

Building costs have come down significantly since the height of the market a couple of years ago. Both labor and materials are down 15 percent.

"It's the biggest drop I've seen since 1984," he said.

But it comes at a significant cost, he said. A carpenter who was making $16 to $18 an hour is now having to settle for $10 to $12 an hour.

"Ultimately, he can't buy a car; he can't make his mortgage payments. It's going to have a ripple effect," he said.

What do you see going forward?

"All the survivors, their old inventory is gone. They can afford to start moving forward," he said. At the end of the second quarter of next year, he thinks, conditions will be back to a "new normal."

Many in his industry agree that 2002 was the last "normal" year and would be a comfortable place to land, he said.

"I think we're going to see real slow, steady growth," he said.