Credit: Kevin Steen

The fact that Wade Jurney Homes has been growing while the market was slowing is a result of circumstances as much as skill, its owner is quick to say. “It’s a combination of luck and discipline,” says Wade G. Jurney Jr., 38, who founded the Greensboro, N.C.based company in 2001.

In 2008 Wade Jurney Homes closed 215 houses in North Carolina’s Greensboro, Winston-Salem, High Point Triad area, up more than 5 percent from 204 the year before. Revenue, too, was up from $28 million to $29 million, boosting the company to within striking range of the Builder 100 list, to No. 110 from 178 in 2007. This year, Jurney expects to grow even more, projecting 262 closings in the Triad and a couple dozen more from an expansion into the Charlotte, N.C., market.

The lucky parts of Jurney Home’s success equation were its location and market segment, Jurney says. “We are in North Carolina,” he explains. While the market clearly has slowed in the Triad, it hasn’t crashed like other markets, which experienced greater price run-ups. “Our [price] appreciation rate here was never more than 5 percent a year,” he adds.

First-time Buyers Are Key

Second, the company builds for first-time buyers, the segment many other builders are now furiously retooling to reach. When first-time move-up and more upscale buyers began falling out of the market, Jurney already had a full retinue of tidy little starter-home products.

“[A] lot of people are talking about credit being very tight, but with FHA, [entry-level] hasn’t been quite as impacted,” says Jurney. “There are always people coming out of apartments, people getting married.”

Jurney also says the company is lucky because it isn’t saddled with undeveloped land or an excess of lots on its books.

But that might fit better under the company’s commitment to discipline.

Avoiding the Land Trap

The temptation to dabble in the land and lot market was definitely strong during what Jurney calls the “crack” years when many builders were addicted to boosting margin by buying and developing their own land. But Jurney didn’t bite, choosing instead to stick to the NVR strategy of buying lots just when he needed them.

“There was a little voice in my head in 2002 and 2003 saying, ‘This is too good to be true,’” Jurney remembers. That niggling feeling was probably prompted by Jurney’s memories of the last big downturn, which his father, a local custom builder, lived through, he adds.

On the other hand, Jurney had just started his own company when the boom began and was only building 50 to 80 houses a year, not enough volume to justify larger land buys anyway.

“I didn’t have a chance to screw up,” he says. “I got into the market at the right time. I had a little bit of heartburn” from owning a few more lots than he would have liked under his just-in-time lot business model when the slowdown hit, but not enough to seriously drain company resources. “We never got way out there like a lot of them.”

He now has about 160 lots on his books in the Triad area, just a little more than he would like.

“We are not making as high a profit margin, though we have remained profitable,” he says. “And we haven’t had to lay anybody off, knock wood. We are still in growth mode.”

Focusing on the Basics

The secret to Jurney’s success that has nothing to do with luck is related to a focus on the fundamentals—sales, value-engineering its products, and conservative financial practices.

Trade Secrets

“A lot of our builder friends in town that have not been through a downturn, their salespeople were just order takers,” he says. “Half the models in Greensboro were unmanned. We have maintained quality, customer service, and we have kept our neighborhoods clean and green.”

Least Expensive Homes

Jurney also worked with SMA Consulting to help improve its operations. The company has cut its number of floor plans from 250 to 50, value-engineering them to the extreme in the process, getting costs down to $42.50 a square foot.

“We have gotten very competitive, price-wise,” Jurney says. The company’s goal is to always be the least expensive builder in town. In the Triad, it builds homes selling from $90,000 to $180,000, with square footage ranging from 1,000 square feet to 4,000 square feet.

The company is beginning to reap the rewards of surviving as its competition closes down. Jurney is hiring the best of his competitors’ employees, strengthening his team, and securing the North and South Carolina real estate assets of C.P. Morgan, the Indianapolis-based builder that closed in February. Morgan targeted the same buyers that Jurney does, making its land holdings a good fit. Investors will purchase the Morgan lots, but Jurney will have partial ownership. “I hate that we’re going through the times that we are, but you can take advantage of the situation,” he says.

Still, he adds, “I don’t want to go into the land banking business. I want to focus on home building.”