The sun reflects off the steel framework of the houses going up on Seeno Street in Monterey. The sound of nails being pounded is conspicuously absent. This is not your typical construction site.

The six custom homes in the new Seeno Park development are the first steel-framed homes to be built in the city, and among the few that have been built in the United States. Houses of steel are apparently making a strong showing in California, and some builders predict it is a trend of the future.

Put together with screws rather than nails, the steel-frames resemble giant Erector set toys. By the time the houses are finished in the next month or so, they will look like any other new house from the outside.

Steel framing is not new and it is commonly used in commercial structures. As the price of lumber fluctuates and the quality of wood diminishes, more builders are looking at light-gauge structural steel to frame new homes. Steel, which is recyclable, cuts down on the use of timber resources and is considered energy-efficient.

A house of metal may cost a little more to build because of the specialized training required to work with steel, but proponents of steel claim the benefits are worth it. The buyer of a steel-framed house does not have to worry about termites, dry rot, warping, settling and creaking floors. These houses are also earthquake- and hurricane-resistant.

"Steel is a hot ticket now," said William Coffey of San Jose, developer and builder of the Seeno Park homes in Monterey. "Builders like me are trying to see if it works."

Coffey, who has built several steel-framed houses near Reno, Nev., said this type of construction "will produce a better home in the Monterey area," where the abundance of sun and moisture contribute to dry rot and termites in wood.

Steel is strong, but it has flexibility similar to that of wood, which is important in earthquake country, Coffey said.

"It hasn't been done in Monterey before, and I wanted to see if they would be received well in this marketplace," said Coffey, who is senior vice president of 8 C's Inc., general contractor on the project.

The Seeno Park houses are about 1,600 square feet with three bedrooms and 2 1/2 baths. They sell in the range of $398,500 to $485,000. "The first three went quickly," said Skip Frates, broker on the Seeno Park project.

Barbara West, a new buyer of a Seeno Park house, toured the site in early July to look at the progress on her home. Standing in the shadows of the steel framework, West said she and her husband, John, looked at another house on the market, but were put off by termite damage.

"I took one look at the steel house--and that reduces [the termites]," she said.

Before deciding to build more metal houses, Coffey said he will evaluate sales, customer satisfaction and the final costs.

Because the Seeno Park homes are customized, they will cost up to 50 percent more to build than a wood-framed house, Coffey said. A custom wood-framed home that costs $200,000 to build would cost about $300,000 in steel, he said.

Construction costs in a tract of steel homes, where the same house plan is repeated throughout the development, would bring the costs down, he said.

Building with steel requires special training by construction crews, who are used to working with wood, said Gordon Eckhardt, superintendent on the Seeno Park project. Steel is less forgiving than wood, he said, and mistakes are harder to correct. No nails are used, just screws, and expensive ones at that.

Nails cost pennies, while screws are a dime each, said Coffey, pointing to some screws scattered on the floor of one of the houses.

Some critics of steel construction claim the walls in metal homes lack energy efficiency because steel creates heat- and cold-conducting thermal bridges to the outside.

The use of the Tri Chord stud, which is resistant to the transfer of heat and cold, takes care of this concern in the Seeno Park homes, Eckhardt said. Builders who do not use this stud, or others like it, would add insulation to the house, he said.

Regardless, all houses and buildings, whether steel or wood, must comply with state energy-conservation guidelines, Eckhardt said.

The fluctuation in lumber prices is making steel more competitive in the home-building market, said Mike Goodman, director of plant operations at Innovative Lane Systems in Lathrop near Stockton. Goodman's firm supplied the roof and floor trusses to Coffey for the Seeno Park project.

"It's coming, and there is nothing anyone can do to stop it," said Goodman, whose firm has six large residential projects in the works in the East Bay and San Francisco area. These include the 2,000-home retirement community in Brentwood north of Tracy and 69 single-family homes in Alameda, Calif.

Goodman's firm, which recently merged with the Nicholas Lane construction company in Anaheim, currently builds about 1,000 steel houses a year but plans to increase that to 10,000 a year statewide by the year 2004.

The fluctuating price of lumber convinced Goodman he should switch from wood construction to steel-built six years ago. When the price hits $560 per 1,000 board feet, construction with steel will become cheaper, he said. "You will see an influx [of steel homes] like you've never seen."

The diminishing quality of lumber was another reason to switch to steel, said Goodman who has been in the construction business for three decades. Twenty years ago, 12- to 13-inch-diameter trees were used for construction lumber, he said. Now fast-growth trees are being cut at 6 to 7 inches, and they are prone to warping and twisting, he said.

Steel-framed houses can be assembled at the plant and installed on site, or they can be built right on the property, Goodman said. The higher cost of building a steel house is due to the need to train framers, he said.

"If they know how to build a house, it's easy to do in steel," Goodman said. "It's just different material and different tools."

Innovative Lane Systems offers free training for people interested in working in the trade. The company said it will be online at www.innovativelane.com by the end of August.