Greg Spier will become president of the Home Builders Association of Massachusetts this week. For 20 years, the company he heads, Maystar Realty, has built custom homes in and around Foxborough. Globe reporter Chris Reidy spoke to Spier in a partially built four-bedroom Colonial home in a Foxborough subdivision called Stonehurst, where he discussed trends in homebuilding and the Massachusetts housing shortage.
Q. Tell me about this house. I assume it incorporates many of the latest styles.
A. People want something that looks old but is maintenance free. So the exterior is cement siding that looks like wood, and we use a lot of plastic and vinyl. That means an $8,000 to $10,000 exterior paint job will last 15 years instead of five.
Everybody wants a functional mudroom these days. Nobody uses the front door anymore or a formal living room. One thing we do is build a playroom off the family room so the family room doesn't get cluttered with toys. When the kids get older, you can turn it into a computer room or an office.
And everybody wants a walk-in pantry off the kitchen.
Q. What's the asking price of this house?
A. It's $825,000, and what you get for your money is 3,800 square feet of living space and an unfinished basement on a lot that's just over an acre.
Q. That's a lot of money. No wonder many first-time buyers are turning to the condo as the Massachusetts starter home of choice. Why are prices so high?
A. It's two things. One is a housing shortage. And the fact that land costs are so expensive. The builder's rule of thumb is that a house sells for about three times the price you pay for land. Today, in Foxborough, the cost of the land you need to build a house can be $250,000 or more.
Q. Will prices come down? Do you think the bubble will burst?
A. The last time we saw the market crash was in the late 1980s and early '90s. Part of the problem then was there was a lot of excess supply. The big difference today is there isn't a lot of supply. Things might slow down. But you're not going to see the bubble burst and prices come way down.
Part of what is keeping prices up is that the cost of supplies and materials is rising. Plywood, nails, steel -- the prices are going up.
One reason, we think, is China. Right now, China is just sucking up all these materials.
Q. Before you started your own business, you worked for companies that built commercial projects in Texas and Florida. Is the planning and permitting process different in Massachusetts?
A. In those states, the county does planning and it has professional people making decisions that impact the whole area. But here in Massachusetts, that's not the case. Planning is done on the community level, and, unfortunately, most of those planning boards are volunteers with no planning experience.
Consequently, we deal with a lot of people who just want to stop growth. Yet the big problem we have is a demand issue. Right now, the Romney administration has determined that we needed 30,000 units per year to meet demand. And last year, we developed about 19,000.
Q. How's your business?
A. Better than last year. 2000 was our best year when dot-commers were buying houses. In the last couple of years, the people we build houses for were losing their jobs. And last year we also had a tough winter. When the temperature gets too low, the nail guns don't work right and you have to think about shutting it down. This year, though, should be pretty strong.