Building competition

Centex Homes enters the market with small infill, planned site in Brush Prairie

It may look small, but the implications are not.

Following a foray into the Camas market, with the completely sold Hillshire development, Centex Homes’ first Vancouver-area venture at 6210 N.E. 84th Street, called Walnut Corner, offers only 20 homes – a little outpost in a land of large tracts of residential property. It’s not the first time the national homebuilder has put houses on Clark County soil, but the development can be considered an advance scouting party for the 50-year-old builder’s designs on the Vancouver and Clark County market, a market that has seen a 26.6 percent drop in home sales over the past year, selling 910 homes in fiscal year 2006.

Centex Strategic Marketing Manager Mark Duncan said the Walnut Corner move is meant to test the waters in hopes of entering the market on a competitive level.

"From a business point of view, there is a risk management component to smaller projects," he said. "Shorter positions allow us to accelerate our learning of Vancouver’s submarket delineations and points of product differentiation."

In plain terms, and to borrow language from the 1988 war movie, Platoon, "They’re probing us. They’re gonna come up and down this line all night trying to find a way in."

The probing analogy fits, according to Pacific Lifestyle Homes Marketing Director Joe Kaiser.

"I think it’s an accurate assessment," Kaiser said. "It’s not really something we fret about. We welcome (Centex) to the market. We’re used to them being around and competing with them for land."

The competed-for land Kaiser refers to is, at least at this stage, scarce. That’s because the county is on the verge of expanding its urban growth boundaries, and until it does so in December, there’s not much dirt available to home builders. Once the new boundaries are defined, builders with beachheads in Clark County will be in a better position to expand. Pacific Lifestyle Homes currently has six projects underway in the county.

Centex plans to build 12 more homes at Walnut Corner, if in fact sales go well there. Duncan said the Vancouver market is attractive because growing families are seeking larger homes in a market that has in the past offered smaller ones. At Walnut Corner, Centex offers homes ranging from 2,433 to 3,487 square feet.

"We design communities with the future homeowner in mind," Duncan said. "We apply research to who the perspective buyer will be and then we begin designing."

At Walnut Corner, Centex is banking on what Duncan calls "move-up buyers from within the community."

Jeff Dimm mans the Walnut Corner sales office for Centex. So far, he’s sold four of the units, and said with homes starting at $326,000, he can’t be beat on price.

"We’re used to being that way," Dimm said. "It’s partly a function of our size. Our buying power is pretty good. And we have the biggest square footage in the immediate area."

When it comes to competition, Duncan begins to sound like a brash new NFL running back or NBA center, citing Centex as its own competition, and touting its awards.

"Our top ranking in customer satisfaction measured by JD Power and Associates, quality and product design ultimately leaves us to constantly compete with ourselves."

Duncan went on to say the company’s 10-year structural warranty program "far surpasses what other builders in our class may offer."

Kaiser said he is always in competition with Centex, but allows that Duncan’s reference to self-competition is an accurate one.

"A lot of national builders will end up competing against their own price point," he said, "but when you’re a big national (such as Centex), you compete in many different categories."

Pacific Lifestyle Homes as well competes in more than one category. The builder offers a "cottage" line, with homes averaging 1,700 square feet. The "premier" category, at 2,400 to 3,700 square feet, is the category most competitive with Walnut Corner. The builder offers two premier developments in the Vancouver area.

Along with the test bed at Walnut Corner, Centex will open a new community in Brush Prairie in Late September. Rosewood will offer homes on quarter acre lots. The 2,400- to 3,400-square-foot homes will offer three- and four-car garages.