By Iris Richmond. After more than 20 years in Houston, Standard Pacific is exiting the market. The division was the builder's first in Texas and its first start-up. Of the company's 4,311 closings nationwide last year, Houston generated just 76 — down from a high of 296 in 1983. By contrast, the market leaders' production ranged from Beazer's 669 closings to Lennar's 3,323 closings.
Chairman and CEO Steve Scarborough says Standard Pacific wants a division to be able to perform in the 500-unit range. "We didn't get there in Houston," he says.
Price points may have been part of the problem; builders producing homes in the $175,000 range are reporting strong sales, while high-end sales have slowed, says Mike Inselmann, president of Houston-based American Metro/Study Corp. SP's Houston homes start in the upper $200,000s.
To build less expensive homes, a company can dedicate only so many resources to a business generating less than 2 percent of its overall production, says Jeff Meyers, CEO of Meyers Group in Irvine, Calif. "I don't think this is a permanent move," he adds. "It's such an interest-rate market right now. The focus is on market reentry, with a lower-end product strategy."
The division's 16 employees will be transferred or let go after completing the homes already under construction at the time of the Irvine-based company's August announcement.
Published in BIG BUILDER Magazine, October 2002