The ‘Keep moving’ business plan

Had the opportunity this week to gather with a group of folks related to the home building industry.

The Greater Fort Smith Association of Home Builders presented its 2011 Showcase Home as part of its overall Parade of Homes program. Proceeds from the sales of the showcase home, which is built primarily through donated time and materials, help support the association.

The association is one of the few in Arkansas to continue with an active home parade schedule — one in the fall and one in the spring — AND a showcase home. That’s right. Here in Fort Smith, we are home to one of the more aggressive and innovative home industry-promotion programs in the country. Not even in Northwest Arkansas, where the skies are always blue, the children always perfect and Wal-Mart execs walk on water while doling out hundred-dollar bills rolled up in round-bales, do they have such an active home show program.

But the association is not the point of this rambling. The point is those group of home builders and what they do, have done and continue to do in a regional economic sector that too often gets overlooked by us folks here at The City Wire and other media outlets.

The thing is, being a success in the home building industry is tough in good years. There are skilled trades to keep on the payroll, federal, state and local rules to understand and abide by, construction loans to secure, federal, state and local rules to understand and abide by, negotiations with Realtors, federal, state and local rules to understand and abide by, weather issues, federal, state and local rules to understand and abide by, price fluctuations in building materials, and, last but not least, federal, state and local rules to understand and abide by.

Cat herding is far easier.

And, just when home builders believe they have the aforementioned factors somewhat contained, the results of Congressional incompetence and Wall Street malfeasance throw the national housing market into a tar pit full of alligators surrounded by land mines and all bordered by a wall of slimy Congressional financial sector “fixes” that causes the previous Congressional incompetence to appear Einsteinian.

Times have been tough on the regional home building sector. Home sales in Crawford, Franklin and Sebastian counties between January and August are down almost 5%. The year-to-date dip in the number and value of homes sold in the Fort Smith area continues a trend in which 2010 marked the fourth consecutive year of decline in the residential real estate market.

Home builders must be about half crazy. And we might also wonder about the sanity of bankers who loan builders the money to build spec homes. You don’t need to attend a church to see faith. You’ll see more faith at a loan signing between a banker and a builder than in the most fiery and brimstoney pentecostal church in the region.

Charles Mock, the builder of this year’s showcase home, was frank in his discussion about how he has survived the ups and downs of the regional and national home industry. He noted that builders just “have to keep moving,” and essentially “have a feel” for how many homes to build in anticipation of demand.

The secret to home building success may best be captured in Charlie Daniels’ 1973 hit “Uneasy Rider,” a song about a hippie who finds himself outnumbered in an altercation during an unplanned stop in a redneck bar in Jackson, Miss.

“I was too busy movin’ and hopin’ I didn’t run outta luck,” Daniels wrote in the latter portion of the song.

Although home builders are often outnumbered by market and political forces, the Daniel’s reference is not entirely fair to home builders There is more to success than pure luck or haphazard forward movement. Home builders still in business, especially in the Fort Smith region, are conservative in their plans and actions. They have the ability to moderate their optimism and pessimism — which is to say they’ve learned to ignore headlines that claim boom or doom.

Regional home builders chase the sweet spot. This year, the sweet spot might be 10 spec homes. Next year, the sweet spot might be five custom homes and a few duplex projects. To that extent, they ARE busy moving, and hoping they don’t run out of luck.

This is not to say all home builders are genius prognosticators and salt-of-the-earth folks. We’ve had a few bankruptcies and lawsuits among and against home builders.

But the folks — home builders, product vendors, architects, plumbers, etc. — at the recent showcase home party are the survivors. And, for the most part, they are true family operations, with spouses, sons and daughters often part of the business plan. They are still moving thanks to a combination of years of experience seasoned with a dose of luck.

You, Kind Reader, may be reading this in a structure built by a home builder who, at the time, was making a calculated bet that your particular structure would sell in a set period of time so he or she could keep moving with another project.

It’s certainly unpopular these days to hope a business or a business owner gets rich, but for all our sakes, let’s hope our local home builders continue to keep moving and are handsomely rewarded for the unique risks they assume each day.

The showcase home each year is about more than highlighting the latest in energy efficiency appliances and products, landscaping, techniques and bells and whistles. It’s more than 2,000-square-feet of structure that serves as a reminder of the struggles, wins, losses and jobs created in the pursuit to build Home Sweet Home.