Stanley Martin Homes Grows During Economic Downturn

Stanley Martin Homes has stayed on top by scaling down

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Stanley Martin Homes

Location: Reston, Va.
Year Founded: 1966
2013 Rank: 61
2013 Closings: 588
Growth Since 2012: 38%
Metrostudy Says: Stanley Martin operates in all four of the most active counties for home building in the Washington, D.C., metro area. While most builders generally are concentrated in two to three price segments, Stanley Martin is successful with first-time buyer product in the $200s all the way up to the $800s.

Stanley Martin Homes, the first Builder 100 firm to surpass its pre-recession sales levels, was able to pull out of the housing slump before many other production builders. Its secret: fewer square feet.

Although things were going well in 2004 and 2005, Stanley Martin execs knew a downturn was inevitable. “Nobody knew when,” recalls president Steven Alloy (pictured), so his company scaled down the size of its homes, anticipating that the firm’s Washington, D.C.–area homeowners—who, at the time, were in a buying frenzy—eventually would have to limit how much they could pay for housing.

While the firm’s signature home in 2003 measured 3,300 to 3,500 square feet, its new, recession-armored products weigh in at 2,800 to 3,000 square feet. The shift equipped the company to stay afloat better than if its inventory had included only large floor plans. “It allowed us to recover financially earlier than many of our competitors,” Alloy says. “We started to grow in 2007 and forward.”

The builder of homes priced from $199,000 to $1.6 million also prepared for the downturn by banking land Alloy believed would be popular during a financial slump: in homeowner-coveted counties in Maryland and Northern Virginia that are close to stable, well-paying jobs in the nation’s capital. As the economy improved and home sales began to recover, the firm in 2011 stepped up its land acquisition in suburban Washington, and by 2013 had added multiple neighborhoods of homes of various sizes.

Last year, the firm reached outside of the D.C. metro for the first time, opening 10 neighborhoods in Charlottesville, Va.—100 miles away. This year, Stanley Martin also will open three communities in Richmond, Va., and three more in Raleigh, N.C., joining the small handful of privately owned builders with a diverse geographical presence, Alloy notes.

For now, Alloy says the firm’s strategy is to keep building in Maryland and Northern Virginia and to make a name for itself in its three new markets. “The rest of this decade will be a golden age for housing,” he predicts

Source: Builder 100 data

Learn more about markets featured in this article: Charlottesville, VA, Richmond, VA, Washington, DC.

About the Author

Sharon O'Malley

Sharon O'Malley is a freelance writer based in College Park, Md. She has contributed to BUILDER for 20 years.

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