New homes for $200,000? It's possible in suburban Des Moines, builder says

A central Iowa home-builder wants to fill a gap in the local housing market by constructing 365 new homes at entry-level prices ranging from $200,000 to $240,000.

Destiny Homes wants to give first-time home buyers an option to build a new home rather than turning to existing construction or townhomes, said Dan Sparks, president of the Waukee-based company.

Destiny plans to build its homes in three developments in Grimes, Pleasant Hill and Urbandale.

"It's absolutely filling a need," said Dan Knoup, executive officer of the Home Builders Association of Greater Des Moines.

New homes in that price range are almost unheard of in the Des Moines metro, where prices typically start at least $300,000, he said.

Sparks said his company has been trying to bring starter homes to the Des Moines market for about two years.

"It's hard for somebody to buy a quality product in the $200,000 price-point, build some equity, and then become a move-up buyer," Sparks said. "It's been kind of a break in the chain, in our opinion."

Most new home construction prices skyrocket once buyers begin adding custom finishes and amenities, Knoup said. Destiny Homes will offer set interior and exterior packages to help keep costs low.

"In this price point, we don't want it to be unlimited options," Sparks said.

The 1,026- to 1,565-square-foot homes will meet Energy Star standards, meaning they are 15 to 30 percent more efficient than typical new homes, and have "quality" cabinets, counters and floors, Sparks said. Destiny has a mix of ranch and two-story models, with three bedrooms, 2½ baths, two-car garages and basements.

Pleasant Hill reduced lot size requirements in a portion of the Peter's Ridge development last month to make way for the affordable homes, increasing the project's density from 86 homes to 151 homes.

"It's really important to us that people who work in Pleasant Hill can live in Pleasant Hill, and we're trying to fill that gap," said Candace Bell, spokeswoman for the city.

According to a 2014 Iowa Workforce Development survey, 1,764 people commute to Pleasant Hill for work. Bell said that's due in large part to the cost of housing in the city.

There have been 37 new homes constructed in Pleasant Hill this year with an average valuation of $302,212, according to city data.

"We're trying to hit that middle ground," Bell said.

Peter's Ridge, a joint project of Knapp Properties Inc. and Destiny Homes, is located south of Southeast Sixth Avenue, adjacent to Four Mile Elementary School and the new Hickory Glen Park. The development will include extensions to the local trail network and a connection to the school and park.

In January, Destiny Homes will break ground in Urbandale's Radiant Point development at 170th Street and Sharon Drive, where it plans to build 78 homes on 13 acres. The company plans 136 homes in Grimes' Beaverbrooke Pointe development.

Homes should be available for occupancy starting in the spring, Sparks said.