Industry Insider: John Carroll, Ryland Homes

John Carroll believes the value of a newly-constructed home cannot be underestimated, especially when compared, in particular, to a foreclosure or short sale home, which may have been abandoned, neglected or outright damaged.

Consequently, Carroll and his staff of 55 at Ryland Homes' Illinois division, based in East Dundee, are actively working to educate potential buyers on the value of a new home in this unusual housing market. The company works diligently to provide that extraordinary value to its new home buyers, said Carroll, president of the division.

“Compare the ease of buying one of our beautiful new homes or townhouses to the arduous, time-wasting process of trying to buy a foreclosure or short sale property where, even if you are successful, you end up with a home that is rundown and has often been abandoned. There is no comparison,” he said.

This forthright, no-nonsense approach, along with Carroll's practice of reaching out to the Realtor community and happily paying them commissions on sales of Ryland homes, has worked in the company's favor, making it one of the top homebuilders in the Chicago area market, selling approximately 250 homes in 2011.

“Most of our potential buyers who have another home to sell are already working with a Realtor when they come to us,” Carroll said. So rather than work at cross purposes with that Realtor, Ryland pays them a co-op fee if their client buys a Ryland home.

“If they are the source of a sale for us, we are happy to work with them. In fact, our percentage of business coming from Realtors has increased dramatically in the past year. Five years ago I couldn't have told you the cost of resale homes in the areas where I was building. It didn't matter. But that has changed.”

Carroll also credits Ryland's senior management, based in Westlake Village, Calif., for the current thriving health of the company.

“They made sure we were well-positioned in our various submarkets so we could react when the market deteriorated. They made sure we held the right assets and liquidated others and had enough liquidity to survive.”

Describe your dream home.#8220;I grew up in the Beverly neighborhood of Chicago and still live there with my wife and children. Several years ago we bought a 1922 Palladian-style brick home, gutted it and totally restored it with period-appropriate trim, doorknobs, etc. It is truly my dream home because I am able to live in the neighborhood I love.#8221;What is your favorite home amenity?#8220;I enjoy the showers with the wall jets and multiple sprayers because that is a great way for anyone to start their day.#8221;His background:Carroll has worked for all kinds of builders from small, family-owned businesses like the one his father owned, to large, public companies. He grew up with a hammer in his hand, spending summers and weekends working for his father.After graduating from the University of Illinois with a degree in civil engineering, he spent six years with Centex Homes, followed by 18 years with Kirk Homes. In fact, he rose to chief executive officer there before the company succumbed to market pressures. Carroll has been president of Ryland Homes' Illinois Division for the past two years.Company details:Carroll now oversees all operations at Ryland Homes in Illinois and sets the future direction of the division. While its total number of homes sold has dropped from about 1,200 in 2006 to 200 in 2010 #8212; and rose to 250 in 2011 #8212; they are now competing against fewer builders and have a much larger share of the pie in the Chicago market.Ryland has seven single-family and four townhouse communities under construction in Montgomery, Gilberts, Huntley, Crystal Lake, Volo, Bolingbrook and Round Lake. The base prices on Ryland townhouses range from $119,900 to $197,000 and those on single-family homes range from $169,900 to $354,900.#8220;Our buyers come from all walks of life because the cycle of life continues and people don't stop needing homes,#8221; Carroll said. #8220;There are those who need more room because they have had another child. There are the newly married. There are the newly divorced. There are also the seniors who are downsizing. We have noticed that purchases are now more need-driven than want-driven like they were a few years ago.#8221;What is the best part of being a builder?#8220;I really enjoy being able to provide quality homes for people and develop terrific neighborhoods. I like to drive back through neighborhoods I have been part of building 10 or 15 years later and see how they have matured and know that, if not for our involvement, those homes would not be there. That is the most tangible motivator for me.#8221;What are the biggest changes you have seen over the years?Technology has changed the selling and marketing process dramatically, he said. Potential buyers can now go online to www.ryland.com and look at the homes, floor plans, options and prices, all by just pointing and clicking. They can even email questions to the sales staff before ever setting foot in the sales center. Hence, Ryland now has very informed buyers and that is particularly important to the young buyers who are accustomed to this kind of shopping and information-gathering.What are your future plans for the division?#8220;We will continue to diversify our locations as more and more of our competition's less-active communities are worked through. We expect to increase our market share as we find the right spots to be geographically.#8220;In fact, we just acquired Lakewood Crossing in Hampshire and plan to open it in January or February with new duplex and single-family models.#8221;Ryland is also in the process of acquiring additional land at Gilberts Town Center in order to build single-family homes on property previously zoned for duplexes.#8220;It has been estimated that 2,400 building permits will be pulled in the Chicago region in 2012 and we expect to account for approximately 10 percent of that because we plan to offer consumers lots of choices and because we have the financial wherewithal to work deals with the banks for additional property.#8221;