Soda Mountain Construction owner Chris Rhodes took a chance when he set out to build a 4,000-square-foot spec home on Ridge Road in 2012.
New building grew scarce during the recession, including in Steamboat Springs, and few builders had the resources or nerve to begin a project on speculation.
“At the time, everyone and their brother said ‘dude, you’re crazy,’” Rhodes said last week, reflecting on the home that quickly sold for $2.1 million, or about $529 per square foot the following August.
Four years later, Rhodes’ company recently completed and sold its fourth spec home, each of which has had a buyer under contract before the residence was completed.
The most recent of which was a 5,100-square-foot home in the Elkins Meadows neighborhood up Fish Creek Falls Road.
The thoughtfully designed mountain contemporary home sold for more than $3.5 million in early December to a buyer identified in August.
Broker Jon Wade of The Steamboat Group was involved with the project from the beginning, and said the home’s tight design was free of wasted space, a contributing factor to the $703 per square foot selling price.
Wade said luxury buyers in the last several years have reined in their preferred home size from the early 2000s, when developers sometimes built spec homes close to 10,000 square feet in size.
“That’s considered extra these days,” Wade said. “People don’t value the size as much.”
Wade acknowledged the discipline shown by Soda Mountain Construction to build a 5,100-square-foot home free of hallways and unused areas.
The buyer, who was represented by Robert Yazbeck of Coldwell Banker Distinctive Properties, had been looking for three years before finding what they wanted in Rhodes’ home.
“They really loved the design of this home and frankly the fact that is was brand new compared to everything else we were looking at,” said Yazbeck, who felt honored to connect the buyers with a “masterpiece” from a Steamboat builder.
Rhodes said the money saved though a thoughtful layout and simpler foundation and roof design allowed there to be more focus on finishes and fixtures.
Also in Rhodes’ recipe for success is a main-floor living concept, a one-of-a-kind property and consideration for maximizing good views and blocking not-so-good views, like that of a neighbor’s home.
“The location is the most important part,” Rhodes said.
Despite Rhodes’ spec home success over the last four years, other Steamboat Springs developers have been hesitant to start a project on speculation, though a few new projects hit the market in 2016 and more are expected in 2017.
“The spec market for single family homes in Steamboat’s luxury market is not for the faint of heart,” said Nick Metzler, broker and owner at The Metzler Team at Colorado Group Realty. “Today’s spec builders are a small niche of very experienced builder/developers with staying power and a willingness to take more risk, for less return than in the early 2000s.”
Metzler said that during the Great Recession, many developers lost not only the spec homes they’d recently built, but also took significant losses to their own financial worth. In some cases it took years before the homes were eventually sold at a loss.
Rhodes said he’s been fortunate to build connections with investors, many who are owners of homes the company has built, to finance his spec projects.
Metzler said buyers can expect to see more spec homes nearing completion trickle onto the market, include a $3.5 million Ridge Road spec home still under construction that entered the market last week, listed by Metzler.
Rhodes said Soda Mountain Construction has plans for two more spec homes to break ground this spring.