Bob Gianos is taking a new approach at Olde Towne, his 50-acre subdivision in Southampton Village, after failing to find buyers for any of his seven 4-acre parcels off Old Town Road in Southampton Village.
The real estate developer has decided to build homes on the land, and construction on one will start as soon as this fall, he said Wednesday.
“We came to the conclusion that we have a very rare asset here, and we’ve taken tremendous time and energy to create a one-of-a-kind environment for homes,” Gianos said.
The move to spec houses is a smart one, considering the upside-down real estate market, said Jim McLauchlen, who owns on Hill Street in the village. McLauchlen said that the value of land sunk dramatically following 2008’s economic crash.
Demand for vacant land skyrocketed pre-crash because buyers could purchase and build a home for less than an already improved lot, McLauchlen said. The supply of existing homes was low, he added. Since the demand for real estate has shrunk post-crash, buyers have been able to find homes for less than the cost of building, he said.
Gianos received subdivision approval for Olde Towne in 2008. Last summer into early fall, Gianos had the entire parcel listed with Saunders & Associates for $81.5 million, and individual plots for between $10.5 million and $13 million, according to a document on the Olde Towne website. In early 2009, the asking prices for the parcels started at $20 million each.
There were a few nibbles, but no deals inked, Gianos said. Although the land is not officially listed, he still receives inquiries about Olde Towne, he said.
The homes at Olde Towne will be custom built and “architecturally distinct,” Gianos said. The designs for the first home are still being crafted, and it is too early to share what the price will be, he said.
Gianos added that his investment in landscaping gives the homes an advantage over the average high-end spec house — he spent about $7.5 million on 440 mature trees, in addition to other landscaping.
“We’re layering in the homes sensitively within the natural environment,” he said. “The standard pattern of development is build a home and throw landscaping around it.”
Prospective buyers at the Olde Towne price point do not want to wade into the two-year long project that comes with building a house, McLauchlen said. They’d rather get a key, and be able to move into their new home the next day, he said.
McLauchlen sees Gianos’ move as a way to break the ice at Olde Towne. Once prospective buyers see activity at the subdivision, they’ll become more interested in building there.