A couple of smaller builders have already adjusted and made the transition from new construction to renovations. This is the firstÂ larger builder making a significant shift. From an email:
As most of you know, I have had the pleasure of representing R. D. Wade Builders, Incorporated for many years.Â I would like to take this opportunity to provide you with their future business plans.
Mike West of R. D. Wade Builders, Inc. will be transitioning their company from a predominately Residential Retail Home Builder to a Property Management Business during the remainder of 2007 and throughout 2008.Â They have several homes currently under construction that are currently on the market as well as several that are under contract.Â As in the past, R. D. Wade Builder will perform on all contracts, warranties and deliver the quality construction we have come to expect.
Indeed, in recent days, several other local builders acknowledged they’ve had to cut their own workforce and that in the upcoming year they expect to build about half the number of houses they’ve completed in other years. Mike Gaffney, of Gaffney Homes, says he’s cut his staff by about half and is discounting some of his existing inventory and converting others to lease-purchase options. Church Hill Homes has cut staff and plans to build about 50 homes this year, down from 80 annually in recent years.
How long before buyers (and good Buyers’ Agents) start asking for financial proof that the builders will be in existence long enough to service their warranties? From a purely economic sense, this probably qualifies as a “good thing;” from the human perspective, it’s quite a loss.