When two former executives of Nebraska’s then-leading builder, Hearthstone Homes, broke away last year to form their own home-building business, The Home Company, they saw a market that wasn’t paying much attention to what buyers wanted.
“We didn’t see a lot of builders that were listening,” recalls Dave Vogtman, who with his partner Nick Dolphens, launched The Home Company in February 2012. Conversations with customers led the builder to eschew the McMansions that had become common in the Omaha area, and move toward smaller, amenity-rich houses. Over the course of its first year in business, The Home Company also made operational changes that included fine-tuning systems for selecting options.
Vogtman says The Home Company's goal is to operate like a production builder but present itself to buyers like a custom builder. He adds that builders like The Home Company must be ready to accommodate home buyers’ demands and tastes that are being influenced by outside sources as varied as HGTV and Pinterest. “We’ve had four customers ask for chandeliers to be installed over their bathroom tubs,” says Vogtman. “I don’t know why, but we’ll do it.”
The Home Company’s responsiveness to buyer's wants appears to be paying off. The builder expected to start 20 homes in nine months last year. But demand was strong enough for the builder to take down 35 lots from its strategic land partner Boyer Young Development; start 55 homes, and sell 40. By adding features, the company has been able to increase the range of its house prices to between $200,000 and $300,000, from between $165,000 and $250,000 when it launched.
Meanwhile, Hearthstone Homes, once Omaha’s largest builder in annual closings, is defunct as an operating entity. The builder filed Chapter 11 on Feb. 24, 2012, and that case is still active as creditors are attempting to recover assets and payments. Builder was unable to reach Hearthstone’s attorney, Rob Diederich of the Omaha firm McGrath North, for comment.
Last spring, Legacy Homes, a four-year-old builder based in Lincoln, Neb., acquired 40 of Hearthstone’s properties for $2.75 million and its showroom. Legacy also hired six former Hearthstone employees, and has since established a beachhead in Omaha with the intention of following Hearthstone’s business model, according to the Omaha World-Herald.
Vogtman adds that the initial success of The Home Company attracted interest from Colorado-based Oakwood Homes, which offered to buy his company to expand its geographic reach. “We declined [because] we like what we are doing,” Vogtman says, and the partners aren’t eager to turn over command just yet.
So far in 2013, The Home Company has taken down 12 lots from Boyer Young, and it’s shooting for 90 starts this year. (Half that number has already been presold, says Vogtman.) It plans to introduce an entry-level line of ranches and two-story homes that start at $160,000.
John Caulfield is senior editor for Builder magazine.
Learn more about markets featured in this article: Omaha, NE.