Home-building now done differently

Even though Steve Atchison, president of Pulte Homes’ Illinois division, has been in the housing business for 16 years, he has never experienced an economic downturn as large and drastic as the one out of which we are now climbing.

“We thought we had seen downturns over the years, but we now know that they were mere blips. This time we have seen national housing starts shrink from almost 2 million per year to less than 500,000 last year, and that was shocking,” he said.

“We are realizing that housing will fluctuate from time to time, so we all need to pay closer attention to the signals,” Atchison said. “For instance, ten years ago in Michigan, we saw the population there dropping, job growth decreasing and household size dropping, but we kept investing in new housing because we thought people would always need a place to live.”

What he and others didn’t factor in, Atchison understands now, is people won’t buy new houses if they fear or see a loss of jobs.

“We have learned some serious lessons from this recession,” Atchison, 42, said.

Sadly, he said, buyers are now viewing housing as a commodity. In the past, young people aspired to build or buy a very personal, special home for their families, but today it is “all about price” and that is a difficult adjustment for builders to make.

What is your dream house?#147;I would choose a log cabin built in the mountains of Colorado.#148;What is your favorite home amenity?A #147;techie#148; at heart, Atchison said he particularly likes the built-in Apple docking stations that charge iPhones and iPods and also allow you to play music from your iPod through your home speakers. This is an option in Pulte homes.Background:Atchison#146;s career path proves you never know where life will lead you. After graduating from Albion College in Albion, Mich., with dual degrees in computational mathematics and the economics of management, Atchison went to work for Ernst and Young, the public accounting firm. During his four-year tenure there, he earned his CPA certificate.#147;One of my clients while I was at Ernst and Young was Pulte Homes and I eventually went to work in their internal audit unit. I traveled from division to division around the country, auditing them for compliance with company policies.#148;In 1996 he moved to Las Vegas as vice president of finance for the division there. After four years he was promoted to president of the Arizona division in 2000. The Texas division had Atchison as its president from 2002 to 2004 and then he was moved back to Michigan to run Pulte Homes#146; most profitable division, which is also located within its corporate headquarters. He spent five years in Michigan before moving to Chicago in 2009 to run the Illinois division.Philosophy:#147;This business is all about acquiring property in the right locations and then delivering a finished product that meets the consumer#146;s needs.#148;His responsibilities:While Atchison oversees all operations in Illinois, he spends much of his time handling contracts and negotiations and choosing where to invest when it comes to land acquisitions. He also decides which of his three home-building companies will then build on each new acquisition.The details:Pulte Homes has three divisions which are now developing 37 #147;selling efforts#148; in the Chicago area. Some of its communities have as many as three or four different product lines within them, and each of those are considered a different #147;selling effort,#148; he said.Centex Homes caters to entry-level buyers in more rural locations. Eighty percent of Centex#146;s product falls into the $90,000 to $230,000 price range, he said.Pulte Homes caters to both first-time and move-up buyers in smaller, infill locations with top-ranked schools that are closer to Chicago and to commuter lines. Homes offered by Pulte generally range from $150,000 to $600,000 and are aimed at people with more disposable income and older children, Atchison said.Finally, there is Del Webb for active adults. Anyone age 50 or older is eligible to live in these communities and, contrary to popular opinion, many residents of these #147;retirement#148; communities continue to work. Homes in communities like Grand Dominion in Mundelein and Sun City #8212; Huntley have homes ranging from the $180,000s to the $400,000s.What is the best part about being a builder?#147;It is very rewarding to see raw land or land with an abandoned building on it developed into new homes that families can live in. We builders can see a very tangible result of our work.#147;I also thoroughly enjoy the people and corporate culture at Pulte. They are a primary driver for me.#148;What is the current state of new home building in the Chicago area?#147;Pulte is the largest builder in the Chicago area in terms of both volume and sales. Even now we are building over 500 homes per year here.#148;But Atchison believes the Chicago market is still depressed compared to some other parts of the country that are rebounding more quickly, including Texas, coastal Carolinas, the Northeast and Georgia. Even Michigan has seen a 400-percent increase in building permits pulled recently.#147;But sales in Chicago are still flat and the market is still volatile here. But new home prices are more stable than used home prices thanks to stockholders#146; pressure on home-building companies to return to profitability.#148;The homebuilders dropped their prices and liquidated inventory last year and the result has been stabilized prices, he said.#147;They are as low as they are going to go now and many builders are now building smaller homes with fewer features and less architectural appeal to be able to meet buyers#146; demands for low prices.#148;Future plans:#147;We plan to maintain our primary market share position in Chicago by maintaining our position as the builder offering the highest level of quality and customer service. In that way we plan to keep all three of our brands viable in the marketplace.#148;Pulte is also working to absorb as many distressed asset opportunities as it can in infill locations like Arlington Heights, where buyer demand is higher.#147;We feel that building in these close-in locations will increase our volume. But these infill opportunities left behind by other builders won#146;t sustain us forever. We know that we will eventually have to build further from the city again.#148; 16021106Steve Atchison is president of Pulte Homes’ Illinois division, which is developing the Arlington Crossings community in Arlington Heights.Bob Chwedyk/bchwedyk@dailyherald.com