Many homebuyers, builders going big in Wake County

It didn’t take long for Angie Cole and David Padilla to find their dream home.

The 5,000-square-foot house in North Raleigh has everything the couple could ask for – a three-car garage, guest suite, gym, bonus room, theater room and plenty of space to grow their family.

“It’s the only home we looked at,” said Cole, 30.

For years, urban planners have talked about ideas such as walkability, pushing growth toward dense cores. The economic downturn sparked talks of downsizing, whether out of necessity or desire.

But as Wake County continues to grow, homebuilders are putting up larger homes, often in suburban areas.

In 2014, 31 percent of homes built in Wake were between 3,000 and 5,000 square feet. A decade earlier, about 21 percent of homes built in the county were that size. Nor is Wake County bucking national trends. The average size of a new single-family home in the U.S. was more than 2,600 square feet in 2014.

The takeaway: The McMansion is alive and well.

Developers and builders say there are several reasons why homes in the Triangle have gotten larger.

▪ The price of land in Wake County has increased, which developers say forces them to build more expensive homes for the best return on their investment.

▪ First-time homebuyers, who typically buy smaller homes, are having trouble getting loans, and many are opting instead for apartments.

▪ Families with younger children want large homes with yards and plenty of space.

Homes that are about 3,000 square feet are especially appealing to families, said Rich Van Tassel, president of Royal Oaks Building Group. His company is building a community of homes that average that size in Fuquay-Varina and about 80 homes in North Raleigh that will average 3,500 square feet.

Similarly sized homes Royal Oaks built in Apex not long after the recession sold for up to $600,000, Van Tassel said.

“There was real demand for it,” he said, noting that many of those buyers were people who were selling their current homes and moving up.

Valerie Dolenga, a spokeswoman for Pulte Homes, said the company is also seeing more “move-up” buyers. Pulte Homes is building the Estates at Young Landing in Cary – 44 homes larger than 4,000 square feet, and Arcadia Ridge in Apex, homes that have multigenerational suites for grandparents or grown children.

Count Cole and Padilla among those moving up. They’re getting married this month, and while each already owned a house, they decided to start their life together in a brand new home. Their old homes sold within a month, allowing them to upgrade. Cole, who works as a real estate agent, said that their new home at The Hamptons at Umstead has plenty of room for her 8-year-old daughter and the two more children they hope to have. She also likes that it is convenient to major highways and downtown Raleigh.

From boom to bust

Like much of the country, the housing market in Wake County was booming in the mid-2000s.

Almost anyone could get a home loan, and builders were throwing up homes all over the place – from small homes for first-time buyers to luxury mansions. In 2007, before the market crashed, more than 6,000 homes were built in Wake County.

But the recession dealt a major blow to the housing market. Building at communities such as The Hamptons at Umstead ground to a halt. Housing starts plummeted across the Triangle.

“No neighborhood was safe back then,” said Chris Faughnan, a builder representative for Coldwell Banker who got involved with the Hamptons in 2007.

When the area’s economy began to improve, builders came back, but the market had changed.

Mortgage loans had become harder to get, and that shook a lot of people out of the market, said Jay Colvin, regional director for the Carolinas for Metrostudy, which analyzes trends in the housing market.

The market shifted to customers who could more easily afford real estate.

“You’re having more family buyers, more established family buyers,” Colvin said.

Colvin said the largest market in Wake County is families with kids in middle school and high school.

“They want a yard to play with their kids in,” he said.

But that doesn’t mean all first-time buyers are locked out. Christina Valkanoff, a real estate agent with Re/Max One, said the Triangle is starting to see a lot of younger money, and those with families want larger homes.

Paying for big

Homebuilding in the area is not yet back to its pre-recession levels – in 2014, only 2,362 homes were built in Wake – but desirable lots for single-family housing communities, especially in certain parts of Wake County, are hard to find. Competition for those available lots has driven up land costs, and that in turn has led to higher home prices.

Van Tassel said some homebuilders follow this rule: Whatever you pay for the lot, build a house on it that will sell for five times that amount.

A lot for a single-family home in some desirable neighborhoods inside the Raleigh Beltline can cost at least $300,000, said Tim Thompson, owner of Raleigh Custom Homes and Raleigh Custom Realty. In North Raleigh, a lot can cost around $200,000.

Homeowners paying $1 million for a home typically expect it to be big.

Thompson’s company is finishing a 3,700-square-foot home on Ridge Road. He said he paid $305,000 for the lot and is selling the house for $950,000.

The Hamptons at Umstead restarted in 2012 and now rows of meticulous homes line curving streets. Homes there start at $600,000, and land is again being cleared to make way for more.

Valkanoff, the Re/Max One agent, is building a home for her family there.

Valkanoff said she is seeing more cash buyers, but customers are also getting financing.

“There’s a lot of money here locally,” Valkanoff said. The higher-end market in Wake County is “rocking and rolling,” she said.

Upsizing for family

Like The Hamptons at Umstead, the 12 Oaks community in Holly Springs stalled during the economic downturn. But it has roared back to life and now has more than 500 homes, said David Mason, vice president of the Carolinas for Landeavor, which is developing the neighborhood.

The sprawling development is a draw for families who want large homes nestled near a golf course.

Gina Clapp, director of planning and zoning for the town, said many people are attracted to the area’s schools. Holly Springs also has a good parks system, homes are more affordable than in some areas, and N.C. 540 provides easy access to Raleigh and Research Triangle Park, she said.

“Despite the fact that people think Holly Springs is out in the middle of nowhere, you really can get anywhere in 30 minutes,” Clapp said.

Eventually, 12 Oaks will have about 1,200 homes, Mason said.

Paulette Pekera and her husband bought a 3,000-square-foot home in 12 Oaks in 2011. In December, they moved into a larger home – 3,600 square feet – they built 500 feet away.

Pekera, 50, who moved to Wake County from New York, said her family wanted plenty of outdoor space. She works from home, so she also needed an office.

Spare bedrooms provide plenty of space for family members who visit from up North, she said.

“People want to come and play golf,” Pekera said.

In North Raleigh, Jon and Nancy Olson also decided to upsize.

The Olsons, both 68, wanted more space to host their three children and seven grandchildren. So they sold their 3,000-square-foot house off of Six Forks Road and built a 4,300-square-foot home last year.

“We just didn’t have enough room,” Jon Olson said. “Everyone was cramped in there.”

Staff writer David Raynor contributed to this report.

This story was originally published July 4, 2015 at 3:56 PM with the headline "Many homebuyers, builders going big in Wake County."