Interest rates were tantalizingly low, and homeowners were seizing the day, building starter homes left and right in a hot market.
Sounds like a field day for homebuilders.
But for Bill Darling, president of Frisco-based Darling Homes, his
company was not positioned for that market. It was focused on
more seasoned homebuyers, particularly those looking for a custom-built home with high-end options and lots of details.
As it turns out, those customers were mostly employed in the
technology industry in Dallas, and many were unemployed as the
tech sector went bust around 2001.
“As the industry was flourishing and all over the headlines,
Darling Homes was struggling in the marketplace, because our
buyers were without jobs,” says Darling. “Four-and-a-half percent
interest rates don’t mean anything if you don’t have a job. … Our
big decision was, should we chase that market like everybody else
was doing? That’s easier said than done, especially with a business
model like ours that calls for paying more for a customized home
and a little higher-quality product.
“That’s a whole different mindset and a whole different set of
people within our company. We would have had to start a whole
other company to satisfy that customer.”
Founded in 1987 by Bill Darling and his brothers, Bob and Steve,
Darling Homes started out building patio homes but now builds
custom homes and employs 220 people. In 2006, the company had
$264 million in revenue, selling 709 houses.
As tempting as it was to go after that red-hot first-time buyer market five years ago, Darling Homes decided not to chase the money
but instead continue to do what it had always done well: build custom homes for the middle- to upper-class market. The company
kept its team together rather than scaling back and decided to get
better at what it was doing. Bill Darling believed the market would
turn. And it did.
“That’s one of the reasons we just had our best year ever in 2006,”
Darling says. “We were prepared for the turn, and other companies
were readjusting from having to go after that market.”