Beating Expectations

Yet Charles Cudd, president of Charles Cudd Company, a home design and building firm in Minneapolis, says his custom division has experienced a steady stream of requests for $2 million–plus homes. “We saw no fall off at all last year,” he says. “Right now, we have more sold dollars under contract than I ever had in the history of this company, in 32 years.”

Cudd has two divisions: custom homes and Charles Cudd Signature Homes, which are luxury model homes. The model homes aren’t typically designed individually like a custom home, but the company will modify basic plans to suit homeowners’ desires. While numbers in the company’s custom division have exceeded expectations lately, the Signature division’s work pace has been a bit more checkered.

It really comes down to location. A group of luxury townhouses in Plymouth, where units sell for $700,000 to $900,000, was one of Charles Cudd’s most successful projects last year, and Edina is always a strong area, Cudd says. The firm is currently building two homes on the Minneapolis lakes and another on Lake Minnetonka. Yet Cudd reports it has been a bit slower in the southern suburbs and on the east side of the Twin Cities, where he co-owns Stillwater-based American Classic Homes with builder Don Nelson.

Cudd chalks up the success of his custom division to the fact that well-heeled buyers don’t necessarily have to worry about selling their existing homes before making a move on a new piece of property. Cash flow just isn’t an issue, so if they find their dream lot, they don’t have to wait to tap into equity on their current home to fund the new project.

Feeling the Effects

On the other hand, at the lower end of the luxury market, people are still a bit more reluctant to give the go-head to building an $800,000 to $1.5 million home until they know they can sell their existing house. That’s been the case at Bob Michels Construction. “We’ve had some leads and we’re doing some plans, but everyone seems to be waiting for whatever to happen,” Michels says. “Customers worry about selling their other properties and the business climate. But people are optimistic. I don’t know what they are waiting for.”

Fortunately for Michels, customers aren’t waiting to start large-scale remodeling projects. For a remodeling job in Stillwater that will cost around $375,000, Michels’ is completely gutting the inside of a 20-year-old house. The home originally featured a separately enclosed kitchen, a dinette, and separate family and dining rooms.

Michels’ firm moved walls and opened up the floor plan so the home will be open and airy, with sweeping views of the surrounding landscape. Workers removed old woodwork, added beamed and coffered ceilings in some rooms, built a gourmet kitchen filled with granite, new cabinets, and high-end appliances, and added a hobby area.