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Smaller size makes houses more affordable

May 25, 2008|By ARNOLD S. PLATOU

Amid the toughest economy seen in quite awhile, at least seven or eight new houses have been sold this year in Kensington Villas, estimates Mary Anne Kowalewski.

How?

At Kensington, which began building on a 20-acre tract overlooking Hagerstown's Eastern Boulevard three years ago, building smaller houses has been the answer.

"Smaller" -- 400 to 500 square feet less than those built on the tract a year ago -- translates to "more affordable," said Kowalewski, vice president of sales and marketing in this area for K. Hovnanian Homes, which is building the houses.

What market there is now, she said, comes here only from as far away as Frederick County and northern Montgomery County. Selling houses in the high $190,000s to mid-$200,000s instead of the mid-$300,000s is more affordable for that market, she said.

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The other change that has helped the developer is that some "very, very minor" features standard in the houses a year ago are now optional, she said.

Still though, the market is tough and K. Hovnanian, which brokered mortgages for most of the Kensington homeowners, is aware of the financial pain, too, Kowalewski said.

"The market is the direct result of what is happening to the values of the property," she said. "As much as it is painful for the customer, it is painful for all parties involved, including the investors, the builder. It is painful to all parties."

She emphasized that K. Hovnanian doesn't make the refinancing decisions that many homeowners are seeking. It originates the loans and sells them as investments, she said.

"Anybody who did 100 percent financing is in a pickle," she said. "I feel very bad for them, as well. I hope they stay in their homes for a very, very long time. In the end, it will prove itself to be the right investment."

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