The first significant builder “transition” in Charlottesville

A couple of smaller builders have already adjusted and made the transition from new construction to renovations. This is the first  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.  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.  They have several homes currently under construction that are currently on the market as well as several that are under contract.  As in the past, R. D. Wade Builder will perform on all contracts, warranties and deliver the quality construction we have come to expect.

And – Courteney Stuart has an excellent cover article about Wade’s transition in today’sHooK.

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.

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9 Comments

  1. TrvlnMn November 21, 2007 at 21:27

    …from the human perspective, it’s quite a loss.

    Okay, I’m going to pretend I’m a brick and ask- how so?

  2. Fluco November 23, 2007 at 00:14

    I’m surprised that R.D. Wade made headlines before Hauser Homes. I heard about the latter calling it quits several weeks before the former. I hope salespeople have their fingers on the pulse of things in C-ville because I have to believe that these former uber-builders will be offering big discounts to liquidate available inventory. In fact, I’m sure of it. I’m seeing it in Fluvanna.

  3. Jim Duncan November 23, 2007 at 08:45

    The human loss – a couple of reasons – Wade’s been a leader within the community for many years. While he’s not leaving the community, he is leaving the building community and cutting a lot of jobs (which has apparently already been done). These are not lost jobs that can be picked up elsewhere – everyone is cutting the jobs – and these will affect the wider economy, perhaps significantly as the snowball picks up.

    Fluco –

    I’m not – Hauser/Stonehaus is continuing to build at a fairly rapid pace. It’s harder for them to stop their machine.

    An enterprising and callous soul might see an opportunity to place odds on which builder will go next. I hadn’t seen until the HooK’s story that Ryan Homes had closed their downtown office.

  4. Lonnie November 23, 2007 at 14:05

    I don’t know much about Wade or his building practices, but I’m not sure that him going out of business is a good thing even for those of us advocating more sustainable growth. When a market goes belly up, as this one seems to be doing, then those builders who are left are for more likely to “cut corners”. That means that not only will volume go down, but also the quality. It’ll be hard to convince builders to go the extra mile to be sustainable in their practices, or go green, if they’re just trying to hold their heads above water.

  5. cvilleman November 24, 2007 at 14:42

    I think Ryan Homes closed their office on the Downtown Mall because its main purpose was to serve as a sales center for Cherry Hill, one of their communities. Once the model home opened at Cherry Hill, there was no need for the sales center.

  6. Jim Duncan November 25, 2007 at 09:58

    cvilleman –

    Thanks for the comment and for stopping by.

    I disagree. They also used that sales center to market all of their other developments in the area – it was a centralized place from which to market. I’d be surprised if they don’t start cutting more and more.

  7. TrvlnMn November 25, 2007 at 22:01

    These are not lost jobs that can be picked up elsewhere – everyone is cutting the jobs – and these will affect the wider economy, perhaps significantly as the snowball picks up.

    I think it depends on the job. Certain jobs in the construction industry were always going to be in decline as evidenced by the construction industry’s willingness to hire non-citizen labor to suppress wages and increase profits. That labor pool will move on to other industries.

    Another way the construction industry (at least nationally) is transitioning is to switch focus from residential to commercial. Of course locally there is already too much of that, so that probably isn’t an option here.

    How many other industries had boom and bust cycles (many taking the hit from overseas outsourcing)? I guess it was only a matter of time before the construction industry had it’s bust.

    The first rule for the average worker, if you are labor (that is you are employed by someone else) and earn a decent amount of money, is “in the United States all the good jobs go away.”

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