COVER- Builder bows out: 3,000 houses later, Wade ends an era
With the real estate slump and glut of new houses on the market, it probably comes as no surprise that one of Charlottesville's many builders has decided to get out of the biz. But few in the home building community could have predicted the first to go would be one of Charlottesville's most prominent.
In late October, after 42 years and nearly 3,000 houses built around the area, Randy Wade, founder and owner of R.D. Wade Builder, announced, "We have informed our employees that we will discontinue homebuilding as of January 31, 2008."
Wade, who launched the company in 1965, has left his mark on Charlottesville with early work in the Canterbury Hills subdivision off Barracks Road and later projects in the massive developments of Forest Lakes and Glenmore. The announcement stunned the homebuilding community, many of whom say they consider Wade a mentor and role model.
"He's one of the longest lasting and the finest builders in this area," says Doug Kingma, owner of Kingma Developers. "He has conducted himself and his business with a high degree of professionalism and integrity."
Randy Rinehart agrees. He says his "very close" friendship with Wade stretches back nearly 40 years, to the late '60s and early '70s when both served as presidents of the Blue Ridge Homebuilders Association.
"This man is salt of the earth and has contributed so much to the industry," Rinehart, another well respected builder, says of Wade, 71. "I'm sorry that due to economic conditions and the atmosphere not being positive enough, he's choosing not to pass on his legacy. But I understand and respect what he's doing."
Wade, who is the only person ever honored with a "Builder of the Year" award by the Blue Ridge Homebuilders Association (in 1978), says his company will finish any houses now under construction and will honor all of its existing home warranties. He also explains that his decision was not made hastily or out of financial duress, but rather resulted from his observations over the last several years as the housing market has cooled from the red-hot sales of 2003-2005.
"We've taken a restrained approach to building for the last year and a half," he says. "We've already been through the cut-down stage. We hoped things would get better over that time, but instead they've gotten worse."
Indeed, in recent days, several other local builders acknowledged they've had to cut their own workforce and that in the upcoming year they expect to build about half the number of houses they've completed in other years. Mike Gaffney, of Gaffney Homes, says he's cut his staff by about half and is discounting some of his existing inventory and converting others to lease-purchase options. Church Hill Homes has cut staff and plans to build about 50 homes this year, down from 80 annually in recent years.
Wade, who in his more than four decades of local building has survived ups and downs, says he too thinks the market will rebound this time– but he believes it will take a couple of years. And even then, he says, it may never return to the old "normal," which he says was driven by demand, not greed.
While the average price of houses sold in October jumped to $452,000 from $383,000 a year earlier, the inventory of houses on the market is what's hurting many builders. At the end of October, there were 1,494 houses listed, a 14-and-a-half-month supply. By contrast, three years ago in what was clearly a seller's market, typical periods saw a supply of just two or three months.
For Wade, his favorite times were the years before the boom began in the late 1990s.
"Everything stayed in balance," he says. "Builders knew how many people would be buying and how many [houses] would be bought; it was market-driven. Now we're pushing the market, trying to make the market do it rather than meeting the demands of the market."
While Wade is getting out of the homebuilding side of the business, R.D. Wade will continue as a corporate entity, focusing solely on managing its 155 rental units around the area. The company will retain 10 of its 23 full-time staffers.
Given Wade's past influence on Rinehart, Kingma, and other builders, could his current decision spark an exodus from the industry?
Rinehart thinks not, given that smaller custom builders like himself and Kingma have been less affected by the slump than volume tract builders like Wade. But he admits Wade's decision will have an effect.
"It has to be in the back of individuals' minds," says Rinehart, "that someone as strong as [Wade] has chosen this to be the time to close his business because he doesn't see opportunity on the horizon."
Wade says he hopes his decision won't influence others to follow his example unless they've thoroughly considered their own situations and come to the same conclusion.
"I hope it won't cause anyone to do something they ought not do that might damage their future prospects," he says.
For other builders looking to outlast the slump, Rinehart says he hopes Wade will be around as a mentor for years to come.
"He won't be actively building," he says, "but he's always there for his wisdom and counsel."
R.D. Wade "has always, in my estimation, done the right thing when it comes to housing," says Randy Rinehart, right, in this 1978 photo with his building buddies Randy Wade, left, and Preston Stallings.
PHOTO COURTESY RANDY RINEHART
Despite pulling back from some of its ambitious plans in Albemarle, a woman answering the phone at the local headquarters of Ryan Homes insists– despite a "for lease" sign out front– that the company will reopen its now shuttered Downtown Mall sales office.
PHOTO BY HAWES SPENCER