The New Home Co. sprung to life in 2009 during the depths of the Great Recession and five years later went public. Now, five years after its IPO, the company is one of the country’s top home builders—No. 41 on the Builder 100 list.
CEO Larry Webb says the move to Wall Street was necessary to fuel the company’s growth. “If I wanted to grow our company in multiple markets I needed to be leading a public company because the access to capital and the cost of that capital is much more advantageous if you’re public,” he says.
What didn’t change when the company went public was its commitment to exceptional customer service and personal relationships with the trades and the land sellers. “The real trick is to run a public company with the soul of a private company,” Webb says.
Working in a state that is weathering a housing affordability crisis doesn’t seem to bother Webb even as the availability of land continues to vex the industry. “It is getting tougher in the Bay area and in Southern California to find land,” says Webb. “At the same time, land acquisition people have been telling me for the last 30 years that there’s almost no more good land. The deals they bring in are always ‘the last great deals.’”
Webb believes the firm’s long-term relationships with land owners and sellers gives it a competitive advantage. He’s seeing opportunities on the western side of the Inland Empire and potential north of Los Angeles in the Valencia area. “Orange County is getting more built out but there is plenty of land for the right builders,” he says.
Land isn’t a problem for the company in the Phoenix market where it has eight new communities in the pipeline that are expected to be delivered in next 12 to 15 months. But the labor shortage has thrown some cold water on hot markets in the desert. Webb estimates construction cycles have slowed “30 to 60 days” from where they were at the top of the market due to the labor shortage.
To keep its partners happy the firm has jobs ready when they call in the trades and runs clean jobsites. “My experience has been if you treat the people who are really building your homes as trade partners and not subcontractors, they’ll be there for you,” he says.
The Aliso Viejo, Calif.-based firm is also known for its innovative interior design, including updated floorplans and of-the-moment room treatments like secondary catering kitchens and family studies. Webb credits his wife, Joan, the firm’s chief marketing officer, for staying ahead of design trends.
“She spends a lot of time with the divisions before we design anything” he says. “Through focus groups and interviews with brokers we see what people want and desire.” Webb says his team has seen the end of two-volume spaces and unused formal living rooms. Today’s offerings are defined by open floor plans, large kitchens with islands, and a connection between indoor and outdoor spaces.
California’s upcoming solar mandate is also on the company’s radar. Its Green Life package includes sustainable products like solar panels, high efficiency HVAC, tankless water heaters, and pre-wiring for electric vehicle charging.
“We’ve been planning for it for a long time. Our purchasing people have been offering it forever,” he says. “The only thing that will probably change over time is that what we offered for people as options is sometimes now standard.”
Webb, who began his career as a high school teacher and holds a master’s degree in city planning from Harvard University, sees the worlds of urban and suburban living growing closer all the time and being pushed by market demands.
“Walkability has always been important but drivability in California is also important,” he says. “There is no doubt that density is increasing because everybody is trying to become more affordable and land prices aren’t going down.” New Home is working on communities with densities as high as 18 to 30 homes per acre.
Webb believes his firm’s biggest challenge doesn’t have anything to do with land prices, labor shortages, tariffs, or trade wars. “The challenge underneath everything in home building is not sticks and bricks or land and financing – it’s people,” he says. “Our challenge continues to be attracting the best and the brightest and creating an environment where people come in to do the best work of their lives.”