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retail, all the businesses there and the access to the interstates," Matteo said. "I-64 is a huge draw in terms of being able
to get downtown (St. Louis). You're 15 minutes to downtown from Fairview Heights and O'Fallon. The new interchange at Shiloh
has really opened up that market."
The village of Shiloh is also sizzling, he said, as is Maryville and Edwardsville.
"Maryville has I-70 and I-270 real close," said Matteo. "Maryville's just a great little community. It has that rural kind
of feel, but you can be anywhere you want quickly with that great interstate access. Edwardsville has the university going for
it. That's the big draw there and continues to drive that market. We're seeing a lot of people who are realizing that it's
much easier to work downtown from over here on the Illinois side than it is from St. Charles or Wentzville."
According to Sean Flower, president of American Heritage Homes, these markets are also being driven by good schools, good
locations, increasing commercial development and all the road improvements that the federal, state and local governments have
been making for years.
But there's more to it than that, says Flower.
"You have very competitive home prices compared to St. Louis," he said. "You're able to get the same house here at a lower
price because the ground prices aren't what they are in St. Louis County. You're seeing a lot of local people who have never
had a lot of options on local housing. All of a sudden they have options and are deciding to move up. I think that was a
market that was never served properly," he added. "We are seeing St. Louisans move over, but I think there was an awful lot of
demand in Illinois that's just being satisfied now. That's still a large part of our customers."
Homebuilders say that magnets and amenities also drive these markets. The influence of Scott Air Force base is huge,
according to builders, and the fact that Scott successfully made it through the Base Realignment and Closure Commission
process is pumping new vitality into the market.
"As soon as the BRAC process was done, we saw an immediate jump in contracts that came in," Flower said. "And they weren't
all air force base people. There were a lot of people who owned businesses. There are a lot of businesses that rely on that
air force base and all of a sudden those people felt more comfortable cutting loose. People feel comfortable spending money
now because they know they're going to be there for awhile. It's almost turned into a kind of springtime in July and August,
because demand was so pent up and it was a decent market before that," he added.
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Matteo says that the addition of more retail - like the proposed Collinsville Crossing Shopping Center in Collinsville and
the proposed Dierbergs-anchored shopping center in Edwardsville - will boost homebuilding in those areas.
"They are huge positives," said Matteo. "Anytime you bring those things in, it adds to the quality of life of the people
who we're building homes for. All of those things go hand in hand. They add to the fabric of the community that people like
and make them want to live there. When they can run down the street and get to Dierbergs or Wal-Mart, that's a huge
attraction."
Rather than being scared off by the fierce competition in these hot markets, homebuilders say they are attracted by it. As
Jay Beard, president of Carrington Custom Homes Inc. said, "The competition is here because the buyers are here. It's like
fishing; you go where the fish are."
In fact, Vantage Homes won't even go into a market unless there is already a lot of homebuilding activity, according to
Matteo.
"There has to be a certain number of permits pulled before we feel we can go into a market," he said. "Is the market big
enough to support another homebuilder? Just going in and carving up market share doesn't do you a lot of good. We look for an
area that's growing, where permits are growing and where there's enough to carry our operation."
According to Flower, there are benefits to developing communities in close proximity to competitors.
"If you still have available spots in good locations, you're better off to stay around it," he said. "Everybody's spending
marketing dollars to get people to surf locations so you get a nice effect by concentrating in those areas. After awhile, the
prices get driven up, the ground gets more expensive and that's when you can justify moving out a little bit. But you start
around those hubs."
Homebuilders don't see an end to this market.
"I don't think the demand is even close to being satisfied yet," Flower said. "You think it's a huge amount of growth, but
it doesn't even touch what happens in St. Charles and some other areas. Illinois is just on the start of that curve."
In addition to the pent up demand for new housing by longtime Illinois residents, more and more people are moving over from
Missouri, according to Matteo.
"The (Mississippi) river's no longer the great divide," he said. "People are realizing that there's a great quality of life
here. We're city close and country quiet."
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