Cottage industry -- Timber Creek Homes adapts to new economic realities in housing market

STRATTON -- Timber Creek Homes executives could sit on the front porch of one of their wonderful, big houses and pout about the stranglehold that today's economy has on the housing market. But they've decided, instead, to take a positive approach and offer a new line of cottages -- smaller and less expensive, but, oh so charming and easily adapted to family size and lot location.

Charles Pelkey, co-owner of Stratton's custom-design modular home factory, said that industry and public response to Timber Creek's new "Cottage Series" has been "phenomenal."

"We will be building two -- the 'Craftsman' and 'Log' -- as models to display on Highway 34," Pelkey said. Other styles, or "elevations," are "Traditional," "Victorian," "Coastal," "Gothic," "Mountain," "Nantucket," "Contemporary" and "Chalet."

The smallest cottage is 996 square feet; depending on options, the largest can be 1,500 square feet. Floorplans include a ground-floor master suite with a second-floor loft; ground-floor master suite with one bedroom upstairs; and ground-floor master suit with two bedrooms upstairs.

Additional/alternative modules can house a great room, family room or bedroom(s). An additional bathroom can be tucked under a second-floor shed dormer.

Each floor plan is interchangeable with any elevation, Pelkey said.

The "Cottage Series" was developed by engineers in-house at Timber Creek. "We gave them direction," Pelkey said, "And they gave us what we wanted to accomplish."

Pelkey said the trend today is toward smaller homes, "for a whole host of reasons, including common sense."

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An article in "Gypsum Today: Working Together to Build Value," in May 2008, indicates that the majority of Americans "are now looking for smaller, affordable, high-quality homes."

Indeed, a 2007 nation-wide survey by the "National Association of Home Builders" showed that 58% of home buyers said they would rather have a smaller house with "high-end quality products and amenities."

And a survey conducted in January 2009 and released in a May 19 publication by the same organization found that 88 percent of its members plan to build smaller homes this year.

In the May 26, 2009, edition of the Los Angeles Times, reporter Nicholas Riccardi wrote, "Though the square footage of new houses tends to dip modestly in recessions, the size of the American home has essentially increased since 1973."

Riccardi wrote that even as the typical American family got smaller, the average size of a finished home increased to more than 2,500 square feet by 2007, up from 1,660 square feet in 1973.

He continued, "But that changed last year, when the size of the typical house suddenly shrank by 11 percent. Developers cite many factors: increased energy consciousness, empty-nest baby boomers looking to downsize. But the strongest motivator is clearly the sagging economy."

At Timber Creek, since its first homes rolled out of the factory in 2001, homes have typically ranged from 1,400 to 2,400 square feet. One of its largest, a 2,800-square-feet home overlooking a Rocky Mountains ranch at Telluride, Colo., was built in 2003.

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"We analyzed what appears to be a trend toward smaller homes," Pelkey said, "and decided the best approach to meet housing needs in all the geographic areas we serve was to create a line of cottages."

Although the "Cottage Series" will be advertised in Timber Creek's proven major markets in Colorado and Wyoming, Pelkey said, these new cottage homes would fit perfectly on lots and blend with existing home styles in communities throughout Southwest Nebraska and Northwest Kansas.

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Another source of business for the Timber Creek factory through the first part of next year will be "employee housing" for mountain communities in Colorado.

Pelkey explained that these are homes that a resort community puts up to rent or sell to service employees -- such as teachers, firefighters, law enforcement officers -- who might not otherwise be able to afford to live in the community.

"These houses are sold at a lower price and subsidized by the community," Pelkey said.

Pelkey said, too, that while the gas and oil industry has slowed in Wyoming, there is still housing activity there.

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Although the future looks hopeful for Timber Creek, the factory has not completely escaped troubles created by recent economic upheaval and uncertainty in stocks, banks and the housing market. Pelkey said that while layoffs have been infrequent in the Stratton factory's 7 1/2-year history, they were forced to reduce the factory workforce this past year.

"This economy is so fragile now," he said. "I've been in this business since 1961, and this is certainly the worst I've ever seen."

Even during tight money situations in the mid '60's and into the '70's, Pelkey said, banks would loan money for houses. "Interest rates might be high," Pelkey said, but banks were still making loans.

"But today, it's difficult to get a mortgage," he said. And there is no money anymore for spec homes, he said, which was a portion of Timber Creek's market.

Pelkey sighed. " ... this too shall past. It's just a question of time ... "

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In August, Timber Creek will start its new line of cottages, and a number of large contracts will be ready to build in August.

"Those will carry us into the first of the year," Pelkey said. "They'll keep our people busy."

Come August, he said, they're hopeful that economic woes will be behind them. Pelkey said, "There's a good possibility of that."