Site work has stopped on Pulte Homes’ Del Webb community outside of Houston until the market improves.
“Del Webb and Caldwell Companies, the developer, continue to review a come-to-market strategy for a Del Webb project in Richmond, Texas,” Pulte spokesman Mark Marymee wrote in answer to a question about the project. “We have stopped major development activity on the site and expect to prepare the site for opening once market conditions improve.”
There’s no word on whether any of Pulte’s other Del Webb or Sun City communities have been mothballed. Pulte has three other projects in Texas up and selling in the Dallas, Austin, and San Antonio markets.
“Nationwide, we currently have more than 50 Del Webb and Sun City communities open for sale. We don’t have any information to provide beyond that,” Marymee wrote.
It wasn’t lack of buyer interest that put the 500 acre, 1,520-home project on hold, said Peter Barnhart, vice president of Caldwell Cos.
“The response to the product offering has been fantastic to date,” Barnhart said. It’s the right location. It’s got all the ingredients to make a good community there except the consumer mind is shot. Mostly, the buyers in there now, their biggest concern is ‘Can I sell my house?’ “
“What we’ve done over there, instead of opening up right now, said let’s push it out to where the world is a little bit rosier,” he said.
Barnhart said most of the site work is done, including installation of the underground utilities. The streets, lot site prep, and completion of the entrance remain unfinished.
“Right now, we could have delivered model lots next month,” he said. Everything could be finished “at a moment’s notice in six months.”
The stop work was unhappy news for Richmond City Manager Glen Gilmore. “I know our folks around here were excited to know that they were coming,” he said. “We got phone calls on a regular basis about it. I feel there is a market out there and now it’s just a timing issue.”
The development would help the city’s economy, he said. “It’s kind of unique in the fact that supposedly it’s not going to affect our school systems and it doesn’t really affect transportation all that much because these folks don’t leave at eight o’clock in the morning to go to work in Houston. We’re certainly doing everything we can to help them keep on track, but there’s not much we can do. It’s the national market.”
The national market has been wrecking havoc on Pulte’s home sales, even in its active adult Del Webb and Sun City brands.New home orders were off 61% in its last quarter of ’08, with 1,763 homes. And, if cancellations continue at the 47% rate the company experienced in that quarter, Pulte can expect to lose a lot of those. The company’s Del Webb brand’s cancellation rate was lower at 43%. That has left the company with more spec inventory than management is comfortable with.
“Candidly, almost all the to-be-built are cancelling and they end up specs,"Pulte CEO Richard Dugas said during a recent investor call after its financial results were released.
Teresa Burney is senior editor at BIG BUILDER magazine.
Learn more about markets featured in this article: Houston, TX.