Hillside Advantage

In a real estate market as challenging as the one that exists today, builders would do well to mind the words of architect Ludwig Mies van der Rohe, who is credited with the maxim, “God is in the details.” It was a more positive take on an old saying, “The devil is in the details,” which reminded planners that even great projects could fail without attention to the little things. As Mies van der Rohe pointed out, it's equally true that great projects soar when details are remembered and thoughtfully incorporated.

From designing floor plans that match the lifestyles of the target buyers and merchandising the models to training the sales staff and forging relationships with local Realtors, details are at the heart of Serramar at La Mesa. At this Lucas and Mercier Development neighborhood in the San Diego market, nothing has been overlooked.

Built on a hillside that offers sweeping views of the ocean, downtown San Diego, or the county's back country, Serramar was the first new single-family, detached development in La Mesa in years. Located near established neighborhoods, it offers nearby residents an opportunity to move up to a new home rather than fix up their older home. Plus, because Serramar is in a long-established neighborhood with existing services, buyers don't have to pay Mello-Roos taxes. A Mello-Roos tax district is a financing tool used by cities and counties in California to pay for new services such as schools, roads, libraries, and police and fire protection. This tax cut alone saves buyers thousands of dollars a year and makes their homes more attractive at resale.

COZY AND CLASSY: Builder/developer Lucas and Mercier packs a host of design features into the plans at Serramar. An extensive color palette and a wide range of elevations minimize redundancy in the streetscape.

With nine floor plans available from 2,077 square feet to 4,264 square feet, Serramar offers a very wide range of options for prospective customers, whether they're single professionals, young couples, growing families, or downsizing empty-nesters. Plans 1 through 6 were designed by Newman Garrison Gilmour + Partners; Plans 7, 8, and 9, the largest of the plans offered at Serramar, were designed by Bassenian Lagoni.

The neighborhood has resonated well with local residents, many of whom had lived in their homes for years and were ready to upgrade, says sales manager Marcia Thorne. With elevations ranging from Tuscan to Americana, 27 different exterior paint colors, and a site plan that mixes the smaller and larger plans instead of segregating them, Serramar has the feel of a more established neighborhood that has grown organically over time.

“The builder spent a lot of time making an eclectic family neighborhood,” Thorne says. “In 195 houses, you can barely find a duplicate.”

As the market shifted and buyers found it more difficult to obtain financing, Lucas and Mercier focused its efforts on the smaller, lower-priced plans, says Deborah Moyer, vice president of sales and marketing. “Most builders don't like to do that,” Moyer says. “Land is extremely expensive, so they try to put as large a home on a lot as they can. We went the opposite way, plotted away from larger floor plans that were harder for people to qualify for and put in smaller ones.”

SMALL FOOTPRINT, BIG SPACE: Architect Kevin Newman designed with affordability in mind to make it easier for buyers to qualify for mortgages, yet still feel like their home is spacious. He eliminated two-story family rooms to maximize living space on the second floor, without sacrificing openness on the main floor.

Architect Kevin R. Newman, chairman of Newport Beach, Calif.–based Newman Garrison Gilmour + Partners, says he designed the floor plans for Plans 1 through 6 “with more of an affordable mindset.”

“We try to design plans where they're easier to build so we can take the dollars that are saved in construction and apply them to where you get the biggest bang to the buck, which are the exteriors or to put more amenities inside,” he says.

For example, his Serramar plans called for building 100 percent over the first floor whenever possible, which means no two-story family rooms, but lots of extra space on the second floor without increasing the footprint. By stacking the floors, the builder could minimize structural materials costs, such as window ties and roofing elements, he notes.

Plus, the plans called for 9-foot ceilings on the first floor and 8-foot ceilings on the second. “We designed a footprint that was very compact, but a very open floor plan, to give it some elegance and segregation [of spaces], but not to make it feel so tight on the first floor. The front walls had a lot of movement so you could have a lot of articulation in them.”

With a footprint 45 feet wide by 33 feet deep, “you eliminate rooms people don't use,” Newman points out. On Plans 1, 2, and 3, he designed a great room, formal dining room, and living room/breakfast room configuration. “It makes the house more livable, flexible, and open, and minimizes the smallness of a small house,” he says.

With a smaller house, buyers might have difficulty seeing how to make the most use of the space. Lucas and Mercier teamed up with San Diego–based Design Line Interiors to merchandise models for all nine floor plans, showing off the flexibility of the plans and the high quality of the materials and finishes. An overarching theme for all the models is family life, says Dawn Kearney, president and founder of Design Line Interiors.

Specifications for the interiors were diverse and creative, but not so high-end as to make them unaffordable, Kearney says. “I think that is why this project is selling in a stressed-out market,” she says. “It showed real life, not so over the top. They identified with the lifestyle.”

The goal was to give each house about four memory points. This was especially important, given the number of homes to be merchandised, to differentiate each model. Plan 1, for example, was done in a country French style. It was merchandised for a young family, with a sea creatures–themed child's room, a bedroom for a visiting grandparent, and a loft area that was set up as a scrapbooking room.

“We really believed in having personality in each of the models,” Kearney says. “We asked the question, ‘What do people really do in their lives?' We wanted to make each one fun and creative and functional.”

With the right location, product, floor plans, and merchandising, Lucas and Mercier then went to work on its sales presentation and marketing efforts. Part of that push was to beef up sales training and make sure that every prospective customer got the best possible presentation when they visited the community. The sales team follows the basics of the critical sales path, including a greeting, discovery questions, model demonstration, homesite visit, closing, and follow-up. They're also well-versed on the competition and how Serramar is unique in the market. “We had been on this treadmill of having people line up at the door,” Kearney says. “Now, we're seeing buyers really doing their homework. We're having the sales staff refocus on what sets the community apart.”

They also refocused on their advertising and Realtor relationships. When the market faltered in 2006, Lucas and Mercier ramped up its marketing plan for a fourth-quarter push, Moyer says. “That involved jumping in with both feet, even though we were going into the holiday season,” she says. “We totally took a leap of faith. We were doing full-page ads in The San Diego Union[-Tribune]. We ended up with six net sales in December.”

That push continued into 2007, with strong sales in the first quarter and an overall sales rate of eight homes per month since Serramar opened.

“The market definitely is challenging,” Moyer says, “but not as challenging as we've seen it in the past. There's just a certain number of buyers in our price range and everybody's going after the same guys, someone with better than a 650 FICO score.”

An aggressive Realtor outreach program included a phone campaign, direct mail, increased in-person presentations at Realtor meetings, and, for a short time, increased Realtor commissions. Since the beginning of 2007, 52 percent of sales were broker-driven.

“Early on, we were selling so well, we didn't have a lot of broker participation,” Moyer noted. “We really tried to get out in the community, doing stuff that a lot of people had gotten away from. It's going back to basics.”

LIFE STYLE: With nine models to merchandise, the team from Design Line Interiors themed each house around a particular life phase. One of the smaller floor plans, Plan 2, includes a play room targeting families with young children.