Company Carves Niche in Custom Home Market : Housing: Lindal Homes helps buyers choose a design, then delivers all the materials needed to build it.

Most people have dream homes, and some build the homes about which they dream.

That is what has helped Lindal Homes become the largest manufacturer of custom cedar homes in the world. The company helps customers design their own houses, then ships all the materials necessary to build them.

“Every home we make is a custom home because everyone has their own ideas in mind,” company president and chief executive Doug Lindal said during an interview at his Seattle headquarters. “Our limits are only as wide as people’s tastes.”

Lindal was founded in 1945 by Doug’s father, Walter. The elder Lindal was an engineer, who upon returning to Toronto after World War II saw a need for more options in the housing market.

He felt quality wood was the key and chose Western red cedar, found in the Pacific Northwest. In 1962, the company built a sawmill outside Vancouver, British Columbia, then moved to Tacoma, Wash., finally settling in Seattle in 1971.

Walter Lindal still works with the company, with his three sons now making the decisions. The company is publicly traded, but the family owns two-thirds of the stock.

Lindal started out primarily building vacation homes. Now, it sells about 500 homes a year, 85% as permanent residences.

Lindal’s average customers are 50 years old, with $100,000-plus family income. They are planning the last home they are going to have, they’ve bought before and they know what they like and don’t like. This is a prime market as 10,000 baby boomers are turning 50 every day.

The average Lindal home is 2,200 square feet. Building packages include flooring, roof and wall systems, windows, doors and hardware. Options include sunrooms, skylights, decks and garages. Many opt for office space, a bigger master bedroom/bathroom and a combined kitchen/dining room/family room.

In 1998, the average cost of a Lindal home--made from Western red cedar that has been cut and kiln-dried and comes with a lifetime structural warranty--was $115 per square foot. So, a 2,000-square-foot home would cost $230,000 for materials and construction without the land costs. A similar size home bought through a real estate agent would be about 10% cheaper. Labor costs vary from market to market.

With competition from log and timber frame house builders, Lindal looks to its 150 independent dealer consultants to sell its homes.

Once Lindal customers have secured the land for their houses, the next step is the design process.

Customers often browse the company’s Web site, at www.lindal.com, and others request an interactive CD-ROM, which features 1,600 photos of homes, 57 floor plans, two virtual reality home tours and nine minutes of video home tours.

Eighty percent of the customers begin with a Lindal start-up design. If they like a different design plan, Lindal, for a fee, will modify it to fit the customer’s needs.

The cost includes the design, materials and construction, though Lindal contracts out the construction to local builders.

Doug Lindal believes the keys to his company’s success have been timeless designs, quality of materials and dealers who act as local liaisons to smooth out possible hassles such as working with building inspectors and contractors.

Although Lindal has found itself squeezed the past two years largely due to rising wood prices and poor weather, it remains profitable. Revenue decreased from $48.8 million in 1997 to $37.7 million in 1998; however profits were up from $6.8 million in 1997 to $7.6 million in 1998.