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.