Prime Beach location keeps these new homes selling

If there's one thing truer than ever in a slumping housing market, the success of a new-homes project hinges largely on two factors: location and price.

Two Virginia Beach home builders say they have a textbook example and the sales to prove it.

Terry Peterson Residential Cos. and Napolitano Homes have begun the initial phase of Sajo Farm, a 295-home condominium development off Diamond Springs Road near Northampton Boulevard in Virginia Beach. The community, on the 77-acre former estate of Norfolk industrialist Sam Jones, is just a couple of miles from Interstate 64.

Prices start at about $347,000 and go up to a little more than $512,000. Since the homes went on sale in February, buyers have closed on 16 units, and an additional 17 contracts are pending.

Few other local new-home projects are enjoying such sales. Across Hampton Roads, home builders have reined in construction. During the past three months, cities here issued 894 new-home permits, down about 23 percent compared with the same period last year, according to Residential DataBank, a Suffolk-based housing market research firm. New-home sales, though up slightly in September from a year ago, are down 14 percent from 2006.

Terry Gearhart, vice president of marketing for Terry Peterson, said the community's proximity to major employment centers and th oroughfares has buo yed the sales pace there.

The development is about a mile from Virginia Wesleyan College, two miles from Little Creek Naval Amphibious Base and about five miles from Virginia Beach's Town Center. The interstate puts downtown Norfolk and the Norfolk Naval Station less than 15 minutes away.

Interest in the community has allowed the developers to hold the line on prices and in some cases raise them, Gearhart said.

"That's made people feel very secure, that they can buy a home here and the price won't fall," Gearhart said.

In January, D.Q. Simpson was driving down Diamond Springs Road to take his dog to a veterinarian when he noticed the freshly erected red brick pillars and elaborate sign at the entrance of Sajo Farm.

A computer technician, the 38-year-old had lived the past eight years in the Ballentine section of Norfolk but was interested in moving into a larger, more upscale home that he could customize.

"We also were specifically interested in a condo-style ownership, but not a condo look," Simpson said. "We wanted something where we didn't have to maintain a yard but we still had a say -so in how the community is kept up."

He pulled his car into the complex and surveyed the two model homes. A month later, he was one of the first to put in a contract.

"We never strongly considered any other place," Simpson said. "It's a longer drive to work, but the interstate is very convenient."

Scott Ayers, president of Leading Edge Realty in Virginia Beach, said the developers of Sajo Farm have marketed the community skillfully.

"It's a very upscale look," said Ayers, who is not involved in the project. "They set the stage extremely well. You come in there thinking it's going to be out of your price range."

When Terry Peterson Cos. purchased the land at Sajo Farm in 2005, the parcel was pretty much the only vacant land in the Bayside area of Virginia Beach, Ayers said.

"The Little Creek area is in a growth spiral right now," he said. "It's a great location, kind of surrounded by trees, lakes, everything that people place value on."

The developers also offer incentives, such as helping buyers pay for closing costs, and upgrades, such as granite countertops, to people who obtained financing through a preferred lender, Gearhart said.

Trudy Garland, 53, and her husband have lived for decades in a home about a half-mile away from Sajo Farm. They were looking for a new house but didn't want to leave the area.

"It seemed like the right time and the right area," Garland said. "We wanted something bigger and with less maintenance."

The Garlands closed on a home in Sajo Farm nearly three times the size of their old 1,000-square-foot house, which they plan to sell eventually.

Gearhart said in an e-mail that of the 40 contracts written for homes in the community, just seven have pulled out - a cancellation rate of 17.5 percent.

"That's nearly half the cancellation rate I experienced last year companywide," he said.

For Bruce Vaughan, the community's proximity to Virginia Wesleyan sold him.

Vaughan, vice president of operations for the college, built a house six years ago in the Pungo area of Virginia Beach. The 56-year-old wanted to downsize and move into a house that required less maintenance.

"My wife and I are of the age where we go and visit grandkids, go on motorcycle trips" and don't want to worry about the upkeep, he said. "I thought it was an excellent value for a house that is a cross between a regular tract home and a custom-build house."

Still, one of the unavoidable challenges for homebuyers who might want to purchase at Sajo is the slow housing market. Vaughan, who closed on his Sajo house for $466,000, has had his Pungo property on the market now for five months with no bites.

Josh Brown, (757) 446-2318, josh.brown@pilotonline.com