Million-dollar market, upscale homes available in Novi
By Chris Jackett
While many on the move are worrying about the real estate market, Eric and Mark Guidobono are building multi-million dollar homes at Tuscany Reserve.
The subdivision, located off Eight Mile Road west of Beck Road, is currently under development, holding its grand opening last week.
The community has the potential to fill its 77 acres of land with 58 homes sized at 4,000 square feet and up in two phases over the next five years.
Such custom-built homes will cost between $800,000 and $3 million, with most averaging between $1.5-1.8 million.
“We felt there was a need for it,” Eric Guidobono said. “We’ll always have people in this market looking for custom built homes. We get 20 couples in to look at the homes every weekend.”
Eric is president of Guidobono Building and Mark is president of Cambridge Companies. Together, the brothers are building Tuscany Reserve.
Other shared communities include The Bellagio in Novi and Woods of Edenderry in Northville, where homes run between $800,000 to $1 million. They also built 50-60 homes at Pheasant Hill in Northville and a number of individual locations and subgroups.
The Bellagio, located off Beck Road south of Nine Mile Road, is one of Novi’s most expensive communities.
It reached its capacity in November, six years after it was built, filling up with entrepreneurs, auto executives, Internet and wine investors, professional athletes, a commercial cement contractor and others.
“It’s the same type of product,” Eric said of Tuscany Reserve. “The interiors all have custom trim work. The standard specifications are generous compared to competitors.”
Big houses, small market
Despite the ever-present “for sale” signs stagnating on modest suburban homes, the Guidobonos are cautiously optimistic.
“We’re positioned. We’ve got a great location. We’ve got the perfect storm coming in. Now is the best time to buy. We’re able to buy labor and most materials cheaper than we could’ve four years ago,” Mark said.
“All price ranges (in) real estate have been impacted by the automobile industry. There’s a slump from overbuilding, but (Michigan) isn’t as overbuilt as other areas like Florida, California and Arizona. We feel it will turn around here sooner.”
The industry is looking good for not only builders, but potential home buyers as well.
Scott Lorenz, president of Westwind Communications and spokesman for Tuscany Reserve, said labor costs are more competitive, giving buyers more house for their money.
Feeling the pinch
Although home shoppers may find better deals in the current hard economic times, many are also willing to spend less to purchase a home.
“People shopping in the $5 million price range in 2002 are down to $1.5-2 million,” Eric said. “We hit the market right at the really bottom. It’s going to be slow sailing for the next year or two.”
Eric said they’ve had to scale down homes from 5,600 to 4,600 square feet to make it more affordable.
Mike Fontana, former president of the Michigan Mortgage Association, said a mortgage on a $2 million home could cost about $11,700 per month, which can vary depending on principle interest rates, property taxes and homeowner’s insurance.
He said the narrow market is a special niche commonly filled by successful white-collar professionals, but it will still see the same problems as the rest of the industry.
“It’s definitely a challenge right now. With income, credit and whether they have a house to sell, it can be a big predicament,” Fontana said. “Because the market is oversaturated, they would have to drop the price (of their current home), which creates less equity for down payment for the next home.”
Although costly, the Guidobonos think it’s quite a deal.
“There’s nothing like this on this side of town,” Eric said. “It’s a one of a kind development.”