Home builders, slogging through the worst housing recession in decades, are retooling designs to find and target new and under-served customers.

"Everybody is attempting to find the sweet spot in the market -- or the least sour spot," said Kevin Castanos, a principal at Fresno-based Wathen-Castanos Inc.

Wathen-Castanos hopes it has found that sweet spot with Ivy Gate, a new line of homes at Harlan Ranch east of Clovis that targets young families, while attempting to keep prices affordable.

The houses have larger backyards and more bedrooms than those at Capri Court, the company's small-lot project at Harlan Ranch that Ivy Gate is supplanting. Thirty-six Capri Court lots remain.

"We are trying to reach first-time home buyers with families, and we felt that segment had additional depth at Harlan Ranch," Castanos said.

Surveys showed families want a backyard, more bedrooms (Ivy Gate has three to six bedrooms; Capri Court has two and three bedrooms) and prefer a single story, he said.

So far, the Ivy Gate has been successful. It is one of the most popular products in the region, so the developer applied to amend the master plan at Harlan Ranch to allow the new development standards.

The Planning Commission recommended approval, and it goes before the City Council on Oct. 19.

Wathen-Castanos isn't alone in trying to find ways to thrive in this distressing new-home environment. "There's a lot of innovation occurring in housing," said Leo Wilson, who also builds houses at Harlan Ranch.

Wathen-Castanos went against the grain in some respects in that Ivy Gate models are more expensive than Capri Court -- starting at $244,900, compared to $194,400 -- but it was less about cutting costs and more about creating value, Castanos said.

Wilson, who has typically built houses for families moving up in price and size, has retooled downward. He has three new product lines debuting over the next seven months -- and all will be on smaller lots, which helps cut costs.

"You can't do move-up homes if there aren't any move-up buyers," Wilson said.

About 67% of all the existing houses sold in Fresno and Clovis in August were foreclosures sold by banks, and banks don't use those proceeds to buy a new larger home.

Still, that means 33% of all the deals were typical transactions from one homeowner to another. Many of those sellers are buying a new house, either moving up in size or moving down.

"All of us are focused on the first-time home buyer," said John Bonadelle, a Fresno-based developer.