In your opinion, what is the current state of the industry?
The homebuilding industry has proven to be incredibly resilient. Despite experiencing the most severe retraction over the past few years, the number and strength of “survivors” is impressive. Although every survivor is at a different scale or volume than they once were, they are strong and poised for growth.
The industry is excruciatingly competitive, which is great for the homebuyer. Homebuilders are delivering more innovative and efficient designs, the highest quality and the best values ever.
What is the status of your company and where is it headed?
Like virtually all homebuilders in the industry, Shea Homes has retracted during this difficult time. We are leaner and more efficient. Our focus has been to maximize the return from our existing communities. We have redesigned product at most of our active communities. We have surprised ourselves and our customers with just how much home we can deliver at a reduced square footage, with no need to compromise on bedroom count or the critical living areas of the home (the kitchen and great room, for example). Another pleasant complement to this effort is that we are delivering much larger yards.
We are taking a careful approach to land acquisition but expect to become increasingly active in 2011. We are privileged to be a joint venture partner with the Baker family on the Baker Ranch in Lake Forest. This is a significant master-planned community (approximately 2,000 homes) in the heart of Orange County that has great access to the core employment centers.
We are also looking forward to the grand opening of Blackstone, a master plan that we are jointly developing with Standard Pacific Homes. Blackstone, located in the foothills of Brea, will encompass a total of four new neighborhoods opening in the spring of 2011.
What are the key factors to helping your company or the industry rebound in the next 12 to 24 months?
The most important factor is employment stability and growth. Although it’s confusing to most, the recession is over (we are done falling) and there is modest growth in the economy. Orange County is already producing employment gains, with a forecast for further improvement. This is an important and encouraging step.
We couldn’t ask for a better interest rate climate with truly the lowest rates in memory available. Home value is at an incredible level. This combination of low rates and great value presents an incredible opportunity for homebuyers.
THE HOMEBUILDING EXPERTS: