The Post Dispatch posted an article entitled, “Payne Family Homes Expands during Slump,� in their Friday edition. Robert Kelly, reporter from the Post Dispatch, describes how Payne Family Homes continues to flourish, even during these economic hard times.

“As home builders throughout the area hold steady or continue to scale back on construction during the lingering housing slump, a few are bucking that trend.

Some are even venturing into new territory. Payne Family Homes, a successful St. Charles County builder, is developing its first new subdivision outside that county.

Payne has started building its Ashton Woods subdivision, with 65 single-family detached sites at Eureka in southwestern St. Louis County. Simultaneously, it has added another new subdivision in St. Charles County by opening with 50 sites at Bella Vista in St. Peters.

The new properties have a combined completion value of more than $25 million, based on Payne’s intent to price the homes from the high $100,000s to the low $200,000s at both new subdivisions.

The company has gone to eight from six subdivisions in one year, and it also tripled its work force to 27 employees from nine.

Ken Kruse, president of Payne Family Homes, said he had no real magic formula for success in building and selling new homes during a recession.

‘The main thing we focus on it that we make sure we meet market demand,’ Kruse said. ‘Previously, we were overbuilt. But right now there are so few housing starts in our market that it’s unsustainable. Demand is increasing.’

Sean Flower, president of the Home Builders Association of St. Louis & Eastern Missouri, agreed that demand for new housing was slowly increasing.

‘It’s a much more stable environment now,’ Flower said. ‘Demand hasn’t skyrocketed through the clouds. But you can sit down and reasonably plan for the future now.’

But he said few area builders were expanding their business like Payne Family Homes.

Flower’s company, Flower & Fendler Inc., has built higher end houses in the $400,000 and up range in the Fenton and Columbia, Ill., areas. He said demand for those homes plummeted in late 2008 and early 2009 but has been slowly rising this year.

Payne Family Homes primarily builds houses starting in the low $100,000 range up through the $300,000s. Demand for those houses is picking up steadily in much of the St. Louis area, Flower said.

Kruse acknowledged that Payne, like most builders, had lowered prices on several of its new homes over the last two years. And he said that was working to the benefit of the company this year.

‘Only get better’

Payne closed on 35 new homes in all of 2009 and already has closed on 55 new homes this year, he said, adding that the company could increase its business by 25 percent or more next year over this year.

‘There’s no question that we are bouncing along the bottom of the housing market, and it can only get better,’ he predicted.

Payne Family Homes was formed in March 2009 after its owners bought the assets of the former Manlin Homes. David Payne was managing partner of Manlin Homes for three years, and he remains a co-owner of Payne Family Homes. Allan Schroer, a former executive with Manlin, is the other co-owner.

Kruse, a former executive with the Jones Co., has headed the financial end of the business since the formation of Payne Family Homes. He said his training as a certified public accountant helped him maintain a healthy bottom line for the company.

‘Operationally, we need to execute at every level and run our financial model to compete during these difficult times,’ he said. ‘By researching our neighborhoods, offering a product to meet today’s lifestyle needs and providing our customers a great experience, we have been very successful.’

This year, the company began offering two new basic home styles, which Kruse said had helped spur sales.

One comprises 12 floor plans base-priced from the high $100,000s to low $300,000s. Its premise is to provide owners with a choice of space and design elements. The second is base-priced in the low $100,000s and will allow the company to sell to those who can’t afford Payne’s larger houses but still want new homes, Kruse said.

He said large kitchens and dining areas, spacious family rooms and high ceilings were popular features in most of Payne’s house plans.

Without giving specifics, he said that the company was studying potential new subdivision sites in St. Charles and Jefferson counties, and that it also might move into the Metro East area in the near future.

Kruse said he learned through genealogical research only after getting involved in home building that his great-grandfather, Henry Grote, also was a noted homebuilder more than a century ago.

Grote’s Beetz and Grote Co. built houses in south St. Louis in the late 1800s and early 1900s.

Kruse said his job destiny might have been in his blood, although he didn’t know it until recently.â€�

Payne Family Homes incorporates features that bridge the gap between affordability and luxury-new-look exteriors, flexible floor plans and cutting-edge design elements, which can all be personalized to meet the design and budget needs of the buyer. Anyone in this economy can buy a Payne Family Home that they deserve.