Berkshire builders adapt to a changing landscape
Cheshire-based builder Chris Walsh is working in places like Lenox and West Stockbridge, like this project on East Alford Road, for the first time in ten years.
Photo by Peter Baiamonte
Arthur Jackson still remembers the day in 2008 when the housing market went bust. “That one morning, we went from having three houses lined up to nothing, which is really weird,” says the Great Barrington–based builder. “It had never happened to me before, and the economics of the stock market did not affect us before.”
The only time Jackson recalls his business, the Small Building Company, being impacted so directly by the national markets was after 9/11, when house-building increased from a wave of urban dwellers moving to the countryside.
Ten years on, the area continues to recover from the crash, with buyers more disposed to purchasing existing housing stock, whether for primary or secondary homes. Across the board, the real-estate market in the Berkshires has been slow to rebuild—although it has definitely picked up. And despite the downturn in housebuilding, some builders still have been able to maintain a steady workflow by changing their focus to renovations. Great Barrington–based realtor Lance Vermeulen notes that there is less new building in the Berkshires since 2008 because costs make it less affordable.
“Before the crash, typically you could buy land and build a house for what houses were on the market for. When the crash happened, all of a sudden the house values dropped.”
Vermeulen also notes that prime lots with expansive views or waterfront access have long been sold and built on, and that shifted the market as well. There are now about 450 houses for sale in the southern Berkshires, with over 500 sold during 2017. During that same stretch, 100 fewer pieces of land were for sale and only 60 sold. In 2005, by contrast, almost four times the number of land properties were available, and more than twice as many were sold compared to 2017.
The key to survival for builders has been finding their niches. Kent Hicks’s West Chesterfield–based construction company has specialized in energy-efficient homes since the 1990s and builds many in the Berkshires. Eight years ago, Hicks became certified in passive-house construction, which has helped increase his volume of business. His work doing energy retrofits on existing houses has done well in the last decade, and he is launching East Branch Homes to specialize in more-affordable, energy-efficient homes.
“We’re split down the middle,” Hicks says. “Half our revenue is the retrofits; half is net-zero passive homes.”
Cheshire-based builder Chris Walsh’s business was booming before 2008, but following the collapse, he moved into panelized homes to keep business steady. And he is building in places like Lenox and West Stockbridge for the first time in ten years.
“It’s not a modular home, but it’s got modular pieces,” says Walsh, “and that way, I could speed the process up, keep costs low, and try to offer a nicer product to first-time home buyers.”
These builders say that most, if not all, of their current clients are second-homeowners. For instance, the bulk of Jackson’s references are from out-of-town architects working with buyers. Walsh agrees, saying he draws a lot of people who find him online. Meanwhile, second-homeowners from the previous wave, now older, are more concerned with downsizing and usually are looking at condos.
Affordability has become an issue for many buyers. Jackson regularly meets with people who have moved from New York or Boston and think it will be cheaper to build in the Berkshires— then are surprised to find that it isn’t. And the market for locals having homes built is practically non-existent.
“Our local work usually amounts to renovations that we’re trying to do as inexpensively as possible,” Jackson says. “Occasionally it’s an addition, so that’s somebody working and living here who has a parent moving up from the city who wants to add to their child’s existing house.”
“Before the real-estate crash, you could build a house at $200 a square foot,” says realtor Vermeulen. “Now you’re looking at $350 to $500 and more per square foot.”
In the 1990s and early 2000s, buyers were mostly people of retirement age. Hicks says that still describes his construction company’s clientele, who are typically at the age they are trying to downsize. Same goes for Walsh, whose buyers have moved across the country for access to the cultural scene in the Berkshires—but want it at a more affordable price.
Among his clientele, Vermeulen notices a generational shift. Most now are younger families from big cities, but they are moving in at a slower rate than second-homeowners did 20 years ago, who were typically older. Jackson agrees and notes that doesn’t always result in new homebuilding.
Says Vermeulen: “A lot of the people have been younger or in their 40s, instead of their late 60s, and they’re exploring building but discovering that buying an existing is better.”
Jackson had one customer who was ready to buy property on “The Hill” in Great Barrington and build a house.
“Then a house came up for sale on the hill for $800,000. He did the math and decided he could much better afford to buy an $800,000 house than buy this lot and build,” says Jackson. “That’s what he did, and he’s still happy with that decision.”