People traveling on State Highway 382 just west of Solon have seen several large pieces of earthmoving equipment at work along both sides of the highway carving out what will eventually be a 130-acre residential community.
The Watts Group, a development and real estate company, is spearheading the project, known as Trail Ridge Estates. Adam Hahn, Director of Construction Services, and realtor Cathy DeValk recently sat down with the Solon Economist to talk about the project, which has generated considerable interest, and discussion, within the community.
“This piece of property, to us, is unique in all of the amenities and opportunities that it naturally presented,” said Hahn. For instance, The Hoover Nature Trail, along the former Rock Island railroad right of way, and the Lake MacBride Trail meet along the southern edge of the development with the Rock Island Trail continuing along the west side. Two points in the subdivision will connect directly to the trails. Watts Group has decided to include a dog park in the development with Hahn explaining they feel there is a level of excitement in Solon to have a dog park close by.
“There was some concern it (the dog park, on the southern end of Trail Ridge Estates) is a long way from the parking at the Solon Nature and Recreation Area (SNRA), but Hahn said, “We’re hopeful that most people that are taking their dogs to a dog park are also walking their dog, so its not going to be a big deal to walk a little bit of the trail to get to the park.” A feature of Watts Group developments are multiple ponds, and Trail Ridge Estates will have three with a large pond with nature observation area, and two fishing ponds with fountains. Developers are required to create areas to contain storm water runoff, but Hahn explained they have a choice of “wet bottom” or “dry bottom” retention basins. Dry bottom basins tend to be shallow and dry out within a few days of rain. They typically contain plants such as cattails and other tall grasses.
“Or you can go deeper and make it so it always holds water, and then when it does rain, it holds the extra water and then slowly lets it out. We like wet bottom ponds with fountains.”
Phase I of the project is underway, which entails site preparation and infrastructure (roads, water, sewer, etc.) for 13 duplex lots on the north side of the highway, and 52 single family, and ten additional duplex lots south of the highway. Also, six triplex lots will be included in the development. Hahn said the hope is to have the streets in and approved by the end of this summer, clearing the way for home construction to begin.
Phase II include 60’ wide single family lots to the west. “With the market doing what it is, and lumber (and other construction material) prices going up, we’re expecting the market is going to come back to some two car-type homes, and they’re a little more price point specific. So, we’re excited to have that up there as well.”
For Watts Group, Trail Ridge Estates is all about location and opportunities.
“If you look at Main Street in Solon, it’s a very desirable town to be in, or to be near with all of the eateries, the bakery. There are so many small communities around here that that’s the Main Street they want to have so much. It’s the type of businesses and the people they draw,” Hahn said.
“Solon has been very lucky, or done very well, to recruit or get those businesses to come into town. It’s an amenity that drives people to want to be in that town.” Hahn pointed out while Tiffin is experiencing a population boom, with new housing, new commercial enterprises, and the Clear Creek Amana school district needing to pass bond referendums on a fairly regular basis to expand and/or build new schools to accommodate enrollment growth, “There isn’t really a ton of restaurants, there really isn’t much of a ‘Main Street.’ Solon has done very well with the old or original part of town.”
“That’s what I love about Solon” DeValk said. “It’s just such a downtown atmosphere, and still has that smalltown feel to it. And the schools, no matter when you go by the high school, there’s always cars there. That’s the other heartbeat of Solon, the schools and downtown.”
“We’ve always been watching what’s been going on in Solon, and a lot of the land around Solon is owned by a handful of families. When this family decided that they were ready to sell some of their property, we decided we really needed to take a look at this property,” said Hahn. At the time, the property had not been annexed into the city yet (it has since been annexed in). The feasibility of, and requirements for, annexation and any “ripple effects” on neighbors needed to be determined, he said. The city’s utilities needed to be looked at as well as the logistics of extending water and sewer lines.
“We spent the better part of four months analyzing the property before we got it under contract, and it took us a little under a year from when we first went to the city council to discuss the potential for developing the site to when we finally got it approved last September.” Hahn added, “For anybody who thinks buying a piece of ground and getting annexed, and getting developed, is a quick process; it’s not. But we feel that with all of the discussions and meeting with the city council, and planning and zoning, people in town, and the school district, that we’ve tried to appease everyone and get something that everyone can be excited about.”
Some Solonites have expressed concerns about impacts to the city’s water and sewer system, and the environment beyond. Hahn addressed those concerns saying the company’s civil engineer had to submit drawings and calculations related to those impacts to the city’s engineer. “They are the ones who know the design and how much the water tower or the above ground storage (at the SNRA) can hold, how many gallons per minute it can feed to this side of town, etc. And it’s the same thing with the sewer. The city engineer counts the number of doors (residences), multiplies that by the expected number of plumbing fixtures, and sends those calculations on the Iowa Department of Natural Resources (DNR) to verify they’re still within capacity.”
Single family lots will vary from up to an acre-and-a-half to smaller lots of 6,400 sq. ft. (.35 acres).
“We like to build communities that people fresh out of college in their first job, and who have saved up enough, can buy their first home and move up through (as their families grow, or as they get older and need to downsize),” he said. For people desiring a new place to live, but not wanting to wait for the new development to take shape, the real estate market continues to be very, very active. Many pundits and experts are warning of another housing market “bubble bursting,” on a level comparable to the 2008 financial crisis, which saw home values shot up well beyond their actual value. Financial experts explain the bubble began in the 1990s, but it was the period between 2000 and 2003 when interest rates bottomed out at an amazing 1%. This led many people to take apply for and receive home loans (mortgage), increasing the demand for housing, and consequently leading to a price increase as demand was greater than the available supply. Another factor in the collapse of the housing market was an overall lowering of the standards for getting a mortgage leading to bankers lending money to “sub-prime” borrowers, or borrowers with lower credit than lenders would typically approve. Lenders made the loans, some argue recklessly and with little regard, on the assumption home prices would remain high, and if a borrower defaulted on the loan, the bank (or credit union) could foreclose on them, sell the house, and reclaim their funds. However, in the fall of 2007 home prices began to drop sharply as the demand for houses subsided, and the federal government raised interest rates from ’04-’06 making it more expensive to borrow money. As home prices (value) dropped, people discovered they owed more than their home was worth (often referred to as being “underwater”). Many of those people then defaulted on their loans as the variable rate mortgages skyrocketed on them. The low prices also caused the financial institutions, who foreclosed on the properties, to take a loss when selling them.
However, at Watts Group, there is an air of cautious optimism as a “seller’s market” continues.
“We continue to see that the market is still very strong while interest rates are starting to creep up, and inflation is affecting everything from materials to labor in our construction and pricing, people continue to try to take advantage of interest rates while they’re still low and move through it. Everything we read says there’s still such a strong housing demand that we’re so far behind on supply, that we’re catching up on housing, and we’re keeping our fingers crossed that its going to continue to be this strong market,” said Hahn. “In speaking with our realtors, we continue to see houses sell fast, and with multiple offers received, and sometimes above the asking price. People are starting to release some of their contingencies (a clause in a purchase agreement, which specifies an action or a requirement to be met for the contract to become legally binding), that normally you would always, as a buyer, want to make sure you have. They are so nervous that they’re going to miss it (an opportunity to purchase the house they want). The pandemic shut us down for a little bit, everybody got nervous, and now that everything’s reopened, people are more eager to make their purchases and people over the last year or so have missed out a few times, and they’re getting to the point where they’re not going to miss this time. To their benefit, they’ve done better on interest rates.”
With interest rates rising while inflation continues to soar, Hahn said buyers are having to have “a little more cash on hand to bring to the initial purchase to make it happen. But (many) people have been saving up during their time at home (the pandemic) and received some benefit from the government (stimulus checks, and for some, additional unemployment money), and they’re looking to put it to good use.”
Cathy DeValk was not in the thick of things during the housing collapse. “From what I understand, the loans were given a little too freely, and folks weren’t quite as qualified (credit rating) as they are now. So now it’s more of a demand thing that’s really continued to push the market. Hopefully, there won’t be a ‘bursting bubble’ like there was the last time there was increased demand. It’s been very interesting from a real estate perspective.” DeValk said there’s usually been more of an “even keel” between buyers and sellers. Currently though, “Sellers definitely have the upper hand.” This is leading potential buyers to waive inspections and appraisals (contingencies) while coming up with “more inspired ways to get the house that they want.”
The real estate market in Solon continues to be hot, she said, mirroring the nationwide trend as well as the trend in the Cedar Rapids – Iowa City corridor. “Its helped several people, both buying and selling in Solon, its still the same intensity as anywhere else.” New construction has also continued to move quickly with new developments continuing to spring up, she noted.
A driving factor in a housing market is having a desirable school district, “And we see the Solon school district as very desirable for people to be in,” Hahn said. “Its interesting that its such a large school district, but Solon is still pretty small because there’s so many houses outside of Solon by the lake or toward Cedar Rapids, that are still in the district.” Solon has seen population growth over the last 20 years or so, but Hahn added, “It felt like it was constricted or limited in where it was growing, and we’re just really excited to have our piece of Solon with this land out there, and to be able to come in and make a good hard push to make Watts Group a part of the Solon community.”
Adam Hahn, Director of Construction Services, and realtor Cathy DeValk, both with the Watts Group, talk about Trail Ridge Estates – a new residential community coming to Solon.