Old neighborhoods, new homes

For homebuyers desiring to live close to the city but who still want the amenities of a new home, a “tear-down” home may be an option.

“Tear-down starts refer to construction of a home on a site where a previous structure was torn down before the new home begins development,” according to Paul Emrath, vice president for survey and policy research for the National Association of Home Builders (NAHB).

The NAHB estimates there were about 55,000 tear-down homes built in 2015, a number that is expected to remain steady in 2016.

In the Kansas City metro area, a handful of homebuilders are responding to demand from discerning buyers who identify a specific neighborhood and then begin scouting possible homes for replacement and new construction.

In the Midwest, tear-down homes contributed to about 8 percent of single-family starts last year, according to the NAHB.

Quigley Custom Homes has built a niche in the tear-down market particularly in northern Johnson County, where well-established communities and neighborhoods draw buyers desiring large lots, mature trees and strong schools. These buyers are willing to pay a premium for a new custom home tucked into neighborhoods in Old Leawood, Prairie Village, Fairway, Mission Hills and pockets of Overland Park, according to Dan Quigley, founder of Quigley Custom Homes.

“There is good demand. The general case is that buyers find us,” Quigley said. “People are looking in the neighborhoods and then call us based on word of mouth.”

Quigley has removed, demolished and replaced a half dozen existing homes in several established Johnson County neighborhoods over the last several years, and has one home at 4100 W. 93rd St., in Prairie Village listed on the 2016 Spring Parade of Homes. He says the projects are more expensive because they take longer to build and the homebuyer must cover the cost of demolition.

“These are nice lots away from commercial development with plenty of trees and good neighborhood streetscapes. People pay a premium for these sites, and then they have to pay for demolition on top of that, “Quigley said. “I like to call these ‘donor sites,’ because I see them as patients I am working to revitalize.”

Tear-down projects can be challenging on the development side because homebuilders must navigate design restrictions from existing homeowner associations as well as comply with various site restrictions from city planning departments.

“We have to solve issues of making a home blend in with specific architectural styles and also make sure it fits guidelines for setback, height and other considerations. It’s very different from building in new home, or ‘greenfield,’ developments,” Quigley said.

John Moffitt is a longtime custom homebuilder and remodeler who is venturing into the tear-down market. Moffitt Build LLC will feature its first tear-down home at 8905 Meadow Lane in Leawood during the 2016 Spring Parade of Homes.

“People who look at tear-downs want to be close in and they are willing to pay for that,” said Moffitt, who is also president of the brokerage firm, John Moffitt Co.

Moffitt sees tear-down construction as a niche market, but he does expect to see demand continue to rise in older neighborhoods, particularly on the Kansas side.

“We are continuing to look for lots with homes we can purchase and demolish, and then identify buyers for those new homes,” Moffitt said. “It appears to me that consumers are looking for more options than just new construction out south.”

This story was originally published April 15, 2016 at 7:08 PM with the headline "Old neighborhoods, new homes."