Monday, September 11, 2006

More Waves Hit Sacramento

The shakeout continues for Sacramento home builders. From the Sacramento Bee:

Ax falls at home builders
Firms shed executives, field staff in wake of slowdown.


After months of sales cancellations, production slowdowns and costly incentives to win customers, Sacramento-area home builders have turned to staff reductions and consolidations to help improve bottom lines, analysts and some executives say.

Several public and private home builders have shed executive and field staff in recent weeks, industry officials acknowledge. At least one builder has consolidated offices and another, Colorado-based Richmond American Homes, reportedly shifted its local operations base to Pleasanton after laying off approximately 25 to 30 staffers...

Schleimer, owner of Market Perspectives, said Richmond American made a sizable reduction in its regional work force in recent weeks. One of those laid off said the publicly traded Denver builder cut 20 to 25 management positions. The reduction followed five earlier position cuts, said the former staffer, who requested anonymity because final paychecks have yet to be received...

Among reductions confirmed:
  • Los Angeles-based KB Homes, Inc., the region's No. 2 builder this year, cut 10 percent of its work force through reductions and attrition about 90 days ago. The job losses totaled "in the teens," said Barry Grant, the builder's Sacramento-based North Bay territory president...

  • Dallas-based Centex Homes cut 10 people in June, Pautsch said. "It wasn't dramatic, but it was the first one we've ever done," he said. The firm has since hired field and sales staffers to open new neighborhoods, he said...

  • Michigan-based Pulte Homes consolidated its northern and southern regional divisions last month into one office, said spokeswoman Judy Bennett. Though staffs were trimmed to reduce overlap, she said some have transferred elsewhere in the company...

Schleimer also said there were layoffs at D.R. Horton, Inc., the region's biggest builder with 740 sales this year...Horton's action also was confirmed by Lee Terry, a San Mateo executive recruiter for the building industry. "Horton laid off all through California and Sacramento," she said...

Builders have sold 6,265 new residences the first seven months of 2006 in El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba counties -- 4,655 fewer than during the same months last year, according to Hanley Wood Market Intelligence, an industry tracker based in Costa Mesa. The firm reports that builders also are enduring higher rates of buyers backing out of contracts -- from 23 percent of sales in Sacramento County to 30 percent in El Dorado County.

Prior post on this subject.

6 comments:

Lander said...

Thanks to a reader for sending in this story.

Anonymous said...

The Stockton Record is still trying to push the soft-landing idea with today's article on RE woes trickling down.

Here's a couple of paragraph at the lead of the article

"The red and white banner hanging outside the entrance to Lathrop's Mossdale Landing housing development can be seen from the freeway advertising "new lower prices."

In one of the neighborhoods featured on that sign, development company Beck Properties Inc. has slashed prices on some new homes as much as 11 percent, and about a dozen of their houses are still available.

It is likely just another indication that the ballooning housing market is slowly deflating, experts say."

I wonder which experts he is referring to?

Lander said...

Market slowdown could trickle down

Anonymous said...

For every exec that gets laid off, there must be 8-10 laborers who will lose their jobs as well...maybe more. Doesn't bode well for the Sacto economy over the next couple of years. Let's not forget the job fallout at the mortgage companies, inspection services companies, title insurance, homeowners insurance, a downturn in home improvement durable goods sales, and other industries that have built up to handle home sales 50% greater than they are today. It appears as if we are at the very front end of a scene that could worsen dramatically over time.

patricia said...

this fallout will leave a lot of people jobless. the economy is getting worse everyday but a lot of people are still hopeful that after this, the RE industry will rise again.

Anonymous said...

How can the TV announcers like Tom Sullivan say that the economy is doing well?

Are they smoking something?