Houston-based Newmark Homes has survived hurricanes, floods, and all the challenges normally associated with the home building industry but things were worse when the firm started up in the middle of the Great Recession. “When we were looking for partners and lenders in early 2009, they all asked why we wanted to be home builders in Houston at that time,” says Jeff Dye, vice president at Newmark Homes.
The privately held company survived the downturn and is now thriving and listed as No. 113 on BUILDER’s Next 100 list. Because of soaring inbound migration rates, Newmark is experiencing the challenges of building in one of the country’s hottest housing markets. “Being the second biggest market in the country, every builder wants to have a presence in Houston,” says Dye, and many big builders do. The region is mostly dominated by D.R. Horton, which had a 10.2% market share there last year and Lennar, with 8.8%.
To stay one step ahead of the competition, especially the large public builders, Dye and his staff focus on staying nimble so they can move faster than the giants trying to enter the market. “We can make decisions faster and act on those decisions quickly. Additionally, building 400 homes per year we can make changes and adjust our plans for individual customers. If you are a large public builder doing 1,000+ homes it’s impossible to manage that process for individual buyers,” he says.
Where some of the overheated Southwestern markets are being driven by retirees looking for their place in the sun, Houston is a more diversified market. Dye says Newmark doesn’t have a typical buyer as Houston has turned into a rich melting pot of people from everywhere. The company’s design team has worked to adapt their plans and selection to be attractive to buyers from different cultures.
The Newmark team has also become experienced at dealing with challenges from Mother Nature over the years. For instance, in April 2016, the Tax Day Flood dumped 15 inches of rain on the area in 24 hours and in 2017, Hurricane Harvey rang up $125 billion in damage. The severe weather takes a toll on everything in town including the home building industry. “Hurricanes and flooding have been affecting Houston for hundreds of years,” says Dye. “You have to evaluate many factors about where and what to build. But we have good developers and engineers that are working to develop communities that deal effectively with the environmental conditions that come with living so close to the coast.”
In order to expand its offerings the firm’s executives recently decided to add an option for building on lots owned by homeowners – an increasingly popular tactic.
“We’ve contemplated build on your lot for a long time,” says Dye. “We believe that our product and process are well suited for building ‘custom’ homes on somebody’s lot.”
Newmark’s solution to the labor shortage relies on relationships built on trust over the years with the trades. “Labor is a challenge, but luckily we have long term relationships with many of our trade partners that helps us perform in a restricted market. For example, our masonry contractor has done Newmark brick and stucco since the early 90’s. He takes care of us first,” says Dye.
Despite the ups and downs, Dye says his team take comfort in working with their 82 fellow employees. “We have a great group of very tenured people that care about Newmark Homes and our customers,” says Dye.