Mississippi Blues
The overall situation in the housing market in the Memphis metro area is making many recent home buyers uneasy. Buyers see how most building has ceased and they wonder if their builder will be the next one to declare bankruptcy, leaving them in the lurch.
Credit: Mike Brown
Yet another buyer who’s had warranty battles with his builder and is concerned about the builder going out of business is Rick Stewart, who bought a $175,900 Reeves Williams home in August 2006 in Fairway Woods, a community in Hernando, Miss., a 20-minute ride south across the state line from Memphis. Reeves Williams is one of the area’s largest builders, and Stewart is concerned that the housing slowdown will push the builder into bankruptcy.
Mike Neill, president of Reeves Williams, admitted that the company has slowed down construction, but said Reeves Williams is well positioned to survive the downturn. He said the company built 578 homes in the Memphis metro area in 2006, 412 in 2007, and expects to build around 350 this year in 12 to 15 communities.
When asked about his company’s existing situation and if it could weather the downturn, Neill said there are very few communities in the entire Memphis Metropolitan Statistical Area where building is currently taking place.
“Some inventory burnoff needs to occur first, but we fully expect to restart our building program earlier than most builders, because our burnoff rate is faster,” Neill says.
Credit: Mike Brown
A skeptic, Stewart has had a long feud with Reeves Williams and publicized his numerous warranty issues in a story reported by the local ABC-TV affiliate. The story led to an arbitration hearing last fall, in which Stewart won 21 out of 35 claims, including problems with walls out of square and poorly finished stairwell walls.
While Stewart is grateful that he was able to take care of most of his warranty issues, there is a nagging problem. In attempting to extend out his backyard, the builder filled in a natural drain at the bottom of a hill in back of Stewart’s house.
Both Stewart and the builder could never agree on how many drains to put in the backyard. Stewart said the area needed three; the builder only wanted to put in one, which was based on the recommendation of the engineer who designed the project. The two parties continued to disagree and the result was that nothing got done. Now, when it rains during the spring and summer, the backyard becomes completely flooded. Worse, when it’s hot, the flooded area becomes infested with mosquitoes and the backyard is filled with mud and slime.
Stewart is also concerned about what happens to the community now that the builder is scaling back.
“Who will mow the grounds or clean up after a jobsite has been vandalized?” he asks.
Stewart doesn’t think Reeves Williams will make it. But Neill disagrees. “Reeves Williams has been the largest builder in the Memphis area for many years and consistently expects a 30 percent market share in those areas where we operate,” says Neill. “Of course we expect to survive.”
Other stories in Field Report 2008:
Lien On Me: Contractors left unpaid by a bankrupt Neumann Homes think twice about extending credit to other builders.
Blast Surviors: Builders in Ft. Myers/Cape Coral, Fla., struggle to hang on.