So what does one do as a “spec” (spec is a term used for a home built on speculation that there will be a buyer for it when completed) builder when the banks no longer give loans and the home designs you were building no longer fit the buyer profile? If you are Greg Welch you stay at it and prosper even in the worst of times. Elizabeth Ueland recently sat down with Welch to get the builder’s perspective on the new economy.
CBN: How long have you been a builder?
Welch: I’ve been a builder for 14 years, all in Central Oregon. Right when I got to Bend I started in construction. I have a business background and business degree from Cal Poly San Luis Obispo. I was very fortunate to meet a prominent Central Oregon developer and then mentored with one of his builders.
CBN: How would you describe your business?
Welch: We do 70 percent spec homes and 30 percent custom homes. We focus on the west side and NorthWest Crossing. We have our first spec home in Tetherow that will on the COBA tour this July as well as spec homes in Shevlin Ridge, Shevlin Pine along with those in NorthWest Crossing. All of these are great neighborhoods. NorthWest Crossing is our strongest subdivision. Currently we are building a custom home in the Parks of Broken Top and another downtown.
CBN: How do you differentiate yourself in the market?
Welch: Dedication to the homes we design. We don’t just put houses on lots we envision what the buyer wants and create to that concept. We build to a higher level of quality than the majority of builders. It’s our ethics and the quality of the sub contractors that we hire. We have worked with those subs for 15 years. We create a durable and healthy home with selected quality materials. We have unique floor plans that fit the market conditions.
CBN: What is a healthy home?
Welch: The green features that go into a home. Insulation packages that have a higher r value (the amount of insulation). Windows and other elements to the building process that all have greater energy efficiencies. What makes us different is the research we have done to make a higher quality home with the trades and materials that set us apart.
CBN: What is the market condition you spoke of?
Welch: The current buyer is looking for a smaller home but high quality materials. Open floor plans that live light and bright. The rooms are small but live big. Everyone is downsizing but they want to live big in that smaller space. It’s about 1,700-2,200 square feet where before it was 2,200 -2,500 square feet.
CBN: Who is your current buyer?
Welch: NorthWest Crossing today is mainly empty nesters. We want to bring the families back. NorthWest Crossing started as mainly families. The homes were three bedroom, 2.5 baths with master bedroom up stairs. Today they are all master bedroom down stairs and the majority are single story. The ones that are two story are with the master bedroom downstairs with two bedrooms, bath and a sitting room upstairs. This design works for a family home as well as an empty nester. We are looking at the plans to have more multigenerational usage. Today families are staying longer in their homes requiring them to be multi-functional.
CBN: How did the economic downturn affect you?
Welch: Both positively and negatively, the positive was that it forced us to redesign the plans and really think thing about who our buyers were. The negative is we got stuck with some houses not selling during the downturn. We quickly adapted to the market with a new prototype for the houses. Overall we were one of the first builders who stayed strong during the down turn because our houses were so well received. In the first two years of 2009 and 2010 we sold every house prior to completion. That’s huge! The last three years have gone pretty strong here in NorthWest Crossing. This year has been awesome!
CBN: How are you getting financing?
Welch: We have had to turn to private investors. The banks have not been loaning on specs. I believe Mutual Federal is currently.
CBN: Do you see the real estate market coming around?
Welch: Considering how slow things were, I think we are in for a next little surge. Bend remains desirable and people are moving back here. People are moving here from out of state. I have buyers from all over the country. I think prices will go up, due to the cost of building going up.
This year I have interviewed Lynnea Miller, principle broker of Bend Premier Real Estate; Mike Hollern CEO of Brooks Resources and now Greg Welch a well respected builder. All agree that in terms of residential real estate the mid range priced properties of $400,000 and below have hit the bottom in terms of pricing and are on their way back to stability. The real estate market is coming back. Considering real estate represents 12 percent of our local economy that is good news for all of us.
If you have a business that is booming and would like to share your story and business model contact me at eueland@gmail.com
