Not-so-big homes on parade

The Parade of Homes, long a tradition for Twin Cities home builders and home buyers, has gone back to the 1990s.

This fall's tour, which runs through Oct. 2, includes 278 new homes -- the lowest number since 1991, when the Minneapolis and St. Paul Builders Associations merged and began holding new home tours in fall and spring. Once billed as "the supermarket of homes," the parade has shrunk since 2006, when it peaked at 1,249 homes.

The type and size of the homes in the biannual event are shifting, too.

For past parades, builders relied on "spec" homes and display models, often in new neighborhoods, to showcase floor plans, craftsmanship and products in an effort to generate sales. But a stagnant housing market and smaller pool of prospective buyers have made builders more cautious, said Wendy Danks, marketing director for the Builders Association of the Twin Cities, which sponsors the parade.

Like buyers, some builders are finding it more difficult to get financing and are constructing fewer spec homes, which can rack up costs until they sell.

"We're definitely doing less spec homes," said Jim Kuiken, designer for Accent Homes in Ham Lake. "Financing is much more challenging. Six years ago, we had 18 on the parade. This year we have two."

Instead of spec homes, more builders are opting to show custom-built homes that are already sold.

Seventy percent of homes are below $500,000 and the least expensive -- a $129,900 condo in Andover -- is almost $8,000 less than the lowest-priced home last spring.

Builders say they are focusing on offering architectural details, multifunctional spaces and technological features, such as home automation systems, rather than square footage. "Buyers are also more conscious of the costs of heating and cooling and want a house that's easy to maintain," said Kuiken.

As the Parade of Homes has been shrinking, the Remodelers Showcase has gained ground. The three-day event, which features whole-house renovations, room additions and new kitchens and bathrooms, has 86 remodeled homes on the fall tour, which runs from Sept. 30 to Oct. 2.

"People are staying in their homes because they can't sell them," said JoLynn Johnson, owner of Crystal Kitchen Center in Crystal and chair of the Remodelers Showcase, which is also presented by the Builders Association of the Twin Cities. "So they remodel to make the home the way they want it."

After several lean years, the remodeling business appears to be bouncing back, said Johnson. However, she added that jobs -- and clients' budgets -- are smaller.