For the last several months, the homebuilder segment has been growing more and more positive, and not just on blind faith. The signs are there, and the demand is starting to come back. Riding that momentum, some homebuilders are starting to ramp things up.
Take Stanley Martin, for example. It is one of the largest homebuilders in the Washington metro area and it recently announced a merger with Piedmont Realty and Construction in order to keep expanding south.
The Washington Post conducted a quick Q&A with Steven Alloy, president of Stanley Martin about the move and his outlook, and it was interesting to see his take on the market right now and how that has affected his company’s plans moving forward.
These quotes were particularly illuminating:
“Why we were successful during the downturn is because we recognized very early that the market had shifted from what we call a pre-built market where people order and then we start construction to a buy a house that’s finished or under construction market. … What our company did is we said we recognize what we need to do is have plenty of move-in ready houses, and so we went from being a 5 to 6 percent move-in ready builder to a 70 to 80 percent move-in ready builder and our sales exploded.”
“We still believe the market is like that, particularly today in the Northern Virginia market, not necessarily region wide, but certainly in Northern Virginia. It’s the most severe housing shortage in my career. I’ve never observed anything like it.”
“As we look forward, there is far more demand for single-family homes and townhomes than there are building lots to match that demand.”
“This market continues to recover, we continue to produce jobs, but we’re not producing the lots anymore because many of the jurisdictions have scaled back on areas that you’re allowed to build houses in. … Nobody has a solution for it.”
“What we are seeing right now with the low inventory is prices rising fairly significantly fairly quickly and you have a supply-demand imbalance. Typically, the builders would be able to adjust, bring more homes to market. [But] there just aren’t that many places you can do that, certainly not in the close-in counties.”
Stanley Martin expects to do 630 sales and $300 million in revenue in 2013. For the Alloy’s full thoughts from the article, head here >>> The Washington Post.