Builder striving for lower prices on offerings
Housing affordability continues to be a key concern among home buyers in Houston and across the country.
So for a builder that focuses on the higher end of the market, David Weekley Homes is being challenged to find ways to lower the prices of its homes, which last year averaged $460,000 nationwide and $420,000 in the Houston area.
The company is meeting that challenge by shrinking the size of its homes and building them on smaller lots.
Another important factor: keeping its suppliers happy.
“We’re trying to build up the relationships we have with our development partners and trade partners, vendors and subcontractors to make sure we become a preferred contractor,” said CEO John Johnson. “Costs are going up for all of them, so they’re having to pass their costs on to us and the homebuyers.”
Founded in Houston in 1976, Weekley builds in 20 cities across the United States. The company has divisions that focus on lower-priced homes, urban homes and homes for those 55 and older.
It also has a build-onyour-lot program, which saw a boost after Hurricane Harvey as thousands of Houstonians became displaced or needed to rebuild.
Though affordability is likely to remain an issue for the building industry, Johnson said he’s encouraged by strong consumer confidence, job growth and low interest rates.
Weekley, which ranked No. 7 on the Chronicle’s 2018 list of private companies, built and sold 981 homes in the Houston area last year, earning a
3.2 percent market share.
Revenue in 2018 was
$2.1 billion, up from $1.96 billion the previous year. Johnson expects 2019 to be steady.
But more cost concerns loom.
Tariffs on Mexican imports would raise prices on home building products containing metal components, including breakers, light switches and door hardware. Cement, too, would see increases.
“And a lot of cement comes from Mexico,” Johnson said, “particularly in this part of the country.”