David M. Weekley had modest plans for his business when he first started building houses in 1976. “I wanted to make payroll,” he recalls, “and I wanted to build houses in Houston and make a living.” He’s certainly done that. With just under 4,600 closings in 2007, David Weekley Homes this year is the top-selling for-profit private builder in the country.
Finishing 2007 in the black is an achievement that is, in part, the result of having survived the Texas housing downturn of the mid-1980s, Weekley says. “Houston went from 30,000 housing starts to 6,000,” he recalls. “Most of the people who went broke then had large land positions. That stuck with me, and it’s one of the reasons we’re doing better today than most [national builders]. It was that emotional scar at the age of 32 from that last, very significant downturn.”
Q: Going public was very popular for builders to do in the last decade. Why has David Weekley Homes remained privately held?
A: We were prepared to go public in the early 1990s ... and the market closed on us. The investment bankers came back a year later and said, “Let’s go now.” We rethought our position to not go and to probably never go. … We were concerned it would take the focus off the day-to-day business. Now, we’d never consider it. We can make decisions based on what we feel is right without being under [Wall Street’s] microscope.
Q: You compete with public builders in virtually all your markets. From an operating position, what do you have that they don’t?
A: What I have is our corporate culture as well as the individuals working here. That’s our key differentiator. We probably have the longest-term senior management of any national builder. We’re the only builder named to Fortune’s list of the 100 best places to work for seven years. When the market tightens up, you really want to have people you can count on, and we do. Our focus on customer delight is kind of baked through our entire company. Over 35 percent of our sales are from referrals.
Q: What do the public builders have at their disposal that you, as a private company, wish you had access to?
A: Other people’s money. That’s the truth. It’s a great benefit to have access to other people’s money, but there’s the potential to not treat it as carefully as your own. That access to capital may have been the reason they over-invested in land.