Seeing a return in higher-end market

As part of a family that has been building houses in South Jersey for the last 60 years, Bruce Paparone has seen it all.

And after seeing, and weathering, a long-struggling market, what he is witnessing these days is stronger demand for new homes that translates into "higher sales than we have seen in five years."

The uptick certainly isn't a repeat of what Paparone, president of Bruce Paparone Inc. of Stratford, experienced during the last decade's housing boom - "lotteries and people sleeping out overnight for the next release" of lots. But it is a harbinger of better times, even though many real estate observers say the last six months have been flat compared with the end of 2012 and the first six months of 2013.

Paparone is building at eight sites, some "where we are in the process of finishing as well as starting," he said. Two are big by today's modest standards. Nationwide data indicate that home construction is running at slightly more than one-third of a normal year's 1.5 million units.

One project is Sturbridge Hill in Voorhees, the last section of the Sturbridge Woods development, where a number of other builders, including Scarborough, Pulte, and Tom Paparone, also have built. There are 40 to 49 sites, ranging in price from $479,000 to $600,000.

"Right now, we are putting in street improvements, but we opened for sales a few weeks ago, and so far there seems to be strong demand," Bruce Paparone said.

Sales of such higher-end houses are a "ray of sunshine," as Paparone put it, in a market in which new homes and resales above $500,000 have been lagging even as housing overall has recovered.

Paparone has had a similar experience in Cherry Hill, where he just finished Nine Acre Court in the Country Walk development off Cropwell Road.

Another larger effort is Fox Hunt in East Greenwich, a 40-house development where work is underway on the model.

"We've been in East Greenwich for a number of years, and are finishing up Waterstone with one house for immediate delivery," he said. Fox Hollow, 20 home sites in the Mickleton section, "is almost done, since we are down to the model and one lot."

East Greenwich is "an ideal place to build since it is part of Kingsway Regional School District, a real positive for buyers, and Fox Hunt is a mile off Exit 18 of I-295, making it a very fast commute," Paparone said.

Houses in Fox Hunt range from $349,900 to $450,000, "and we have had a nice start with presales," he said.

Buyers may not be camping out for the choicest new-home lots, but "they are stronger than they were before, locally tied in and solid in terms of their ability to buy move-up luxury homes."

"There are fewer of what we call 'edge' buyers in the market," Paparone said - those whose ability to buy is tied to variations in interest rates.

Today's buyers "are not older, but more selective - many of them young professionals who are doing well," he said. "New household formations, as always, have been the driving force of sales, as well as people relocating for jobs.

"We also have a lot of move-down buyers who want age-targeted homes, with first-floor masters, and some want in-law suites so they can consolidate families," he said. "There are so many opportunities coming our way."

Opportunities for buying land also come his way, since many of his rivals for sites "stopped building or went out of business during the downturn, although we are very selective of what we buy."

Competition continues from national builders, although Paparone said he has found many sellers of land "more willing to deal with us than them. It's all about relationships and having a name and long-established reputation."

Within a 30-mile radius of Stratford, "any opportunities that arise we are always interested in looking at," Paparone said.

Yet these sites still have to pass the builder's litmus test: schools and "commutability" to jobs. Location, that is.

"The farther out you go, the opportunities are much different," he said.

215-854-2472 @alheavens