In the January/February 2008 issue, senior editor Bruce Snider asked custom builders if the current state of the housing market reminded them of past hard times (“On Your Mind,” page 18). We wondered if they were feeling any pain from housing’s steep slide. He asked a similar question in the July/August 2007 issue. In fact, everyone on the editorial staff has been asking some form of “How are things going?” of nearly every custom builder we’ve spoken to for more than a year.
The answers we’ve gotten have been pretty consistent—and kind of surprising considering the avalanche of bad economic news. According to the many custom builders we’ve asked, business is good. And for some of you, it’s very good, even “never been better.” It seems that you are reaping the rewards of your hard-won experience, carefully nurtured reputations, and plain old good luck.
A lot of you who have been around for a while learned long ago the risks of owning land and borrowing money. If you were around for the early ’90s recession you learned that building a house after it was sold was the safest way to be in the home building business. One former production builder who e-mailed us said that’s what converted him to the more stable business of building high-quality, high-priced custom homes—on someone else’s land. Many of you who started your careers during the 1970s economic debacle painfully learned how treacherous spec building could be. I know custom builders who still wince at memories of paying 16 percent and more to carry spec houses that sat unsold for months on end.
Custom builders live and die by their reputations and most of you work hard to make sure yours is highly polished. Those who don’t, don’t last very long. Builders with a sterling reputation have a precious asset that pays off best when times are tough. Underpinning these builders is a host of clients, trades, bankers, vendors, design pros, and friends who can vouch for their honesty, integrity, skill, and high standards. There’s no better way to attract the kind of clients who fly above the economic turbulence.
Luck, of course, always plays a role. Luck that you have the temperament to work with demanding clients. Luck that you didn’t act on that idea to build a small community of spec houses in 2005. Luck that you didn’t tie up more land than you could quickly sell.
