Flexibility. A lot of builders talk about it, but far fewer are willing to fundamentally change how they operate, build, and sell when buyer demand fades and market conditions sour. We highlight 25 builders that made it through the dark days of the past five years by adapting to—instead of bemoaning—market conditions.
KB Home, Los Angeles
KB Home was one of the first big builders to embrace sustainability as a goal for its homes. The company’s most recent efforts have been put toward developing houses that don’t just save energy, but produce as much as they use on average each year.
The company’s net-zero efforts started in 2010 when it worked with Martha Stewart to design and build a net-zero home for the 2011 BUILDER Magazine Concept Home in Orlando, Fla. Now the company has spread its net-zero homes to other markets as well.
KB didn’t stop at building energy-efficient homes; it also has a water-saving program that saves thousands and thousands of gallons a year per house. The company was the first builder to partner with the EPA’s WaterSense program in 2009, and became the first builder to be named WaterSense Partner of the Year two years in a row.
Ivory Homes, Salt Lake City
Ivory Homes has been Utah’s No. 1 builder since 1990. Maintaining that lead has meant shifting gears more than a few times. And during the past recession, Ivory subscribed to a “less is more” business model.
CEO Clark Ivory was one of the first builders to see the housing collapse coming, and he stopped buying land in 2006. Within three years, Ivory had reduced his company’s credit lines to zero. He also expanded into apartment building, which provided cash flow and operational stability.
Ivory Homes is active in 50 communities in Utah, where its homes are priced from the $150s to the $990s. One of those communities is Garden Park, an active-adult neighborhood in the Daybreak master planned community, where on Nov. 1 the builder celebrated the sale of its 100th home.
Grand Homes, Addison, Texas
Grand Homes celebrated its 25th anniversary in 2012. Throughout most of its history, it has been consistently profitable. Grand takes credit for introducing to the Dallas Metroplex design features such as front porches, accented exteriors, and second-story verandas. Its 37 communities close approximately 400 homes per year.
However, this company was chastened during the housing recession. In 2008, its sales virtually fell off of a cliff. Owner Steve Brooks did some soul searching and concluded his business model needed serious tweaking, starting with his uncompromising management style.
Since then, every aspect of Grand’s business model—customer service, design, construction, and employee relations—has been transformed, nudged by consultants Brooks hired to alter his company’s personality. The customer is now king, and Grand Homes’ operations revolve around their satisfaction.
Schell Brothers, Rehoboth Beach, Del.
During the housing downturn, Schell Brothers never failed to turn a profit. Co-owner and president Chris Schell attributes this remarkable feat to the active-adult builder’s branding, marketing, product desirability, and company culture.
What this company is really selling is “happiness.” Advertising emphasizes the fun connected with owning a home. “Focus on happiness and I think the profits will follow,” said Schell, a former hedge fund manager, earlier this year.
Schell is as interested in making money as the next builder. But he places as much importance on how associates and customers are treated. Schell also encourages interaction between employees and buyers through everything from appreciation parties to exchanges on Facebook.