In your opinion, what is the current state of the industry?
This is a market with continued risk but great opportunity. Construction costs are down significantly and new-home inventory, especially in the coastal areas, is very low. It is important to choose locations carefully, as well-located and well-priced properties will continue to sell in this marketplace. Areas with high levels of foreclosure activity will continue to struggle, as valuations of short sale properties and foreclosures will continue to have downward pressure on valuations in those areas.
What is the status of your company and where is it headed?
Waterpointe Homes is in a solid position moving forward. With a strong reputation for building a quality affordable product in desirable coastal areas, a good deal pipeline and strong equity partners, we are positioned well. In addition to Waterpointe Homes, which specializes in quality production homes, I have expanded the operation to include Waterpointe Custom Home Builders Inc. Waterpointe Custom Home Builders specializes in high-end custom homes for clients wishing to build their own custom residence. We are able to provide high quality at an affordable price based on our buying power and subcontractor relationships. In addition to significant cost savings, we are able to build very quickly with a tight scheduling system that we use with our production homes, while not sacrificing quality.
What are the key factors to helping your company or the industry rebound in the next 12 to 24 months?
There are a number of key factors that will affect the industry moving forward – one of which being access to financing. In order for the industry to see a strong rebound, financial institutions need to continue to finance new projects. Lenders need to get the bad loans and assets off of their books, allowing the market to reset, thus allowing developers and consumers alike to have confidence that all of the bad news is behind. There is great pent-up demand, with historically low rates. There are plenty of qualified buyers sitting on the sideline. Unfortunately, many of these qualified buyers are not willing to make an investment of this magnitude until they have the confidence that the worst is behind us. Market confidence is key.