Economy drops hammer on John Wieland Homes

By KEVIN DUFFY

The Atlanta Journal-Constitution

Friday, October 31, 2008

Construction has stopped on about half the John Wieland homes in metro Atlanta and the company's business is off sharply, the founder said Friday.

"Overall, our Atlanta business is down 60 percent from the best years," said John Wieland, chairman of Atlanta-based John Wieland Homes & Neighborhoods and perhaps Atlanta's best known homebuilder. "It may be a little while before it fully recovers."

Wieland said more houses are at the hold stage — incomplete but presentable — than ever before. He put the number at approximately 150. Those are houses that are little more than shells and will remain so for the time being.

"We are holding some of our homes at their current stages of construction while we get over the presidential election," Wieland said. "We have more homes at a hold stage now than we have had previously."

The company's Atlanta home sales were off 36 percent in fiscal year 2008, which ended in September. Closings totaled 350 compared to 547 in 2007.

Wieland Homes forecasts just 300 Atlanta home sales in fiscal year 2009, said Jennifer Nilsson, the director of corporate marketing.

The average sales price of a new Wieland Homes house is $550,000, so the company might be the largest in the metro Atlanta in terms of dollar volume, Wieland said.

Wieland Homes also builds in North Carolina, South Carolina and Tennessee. Its work force has been halved to about 350 since last year.

Wieland said the current slump is the worst he's seen in the three decades since Wieland Homes' founding. The company's struggles mirror the downturn in the metro area housing market.

"Overall, Atlanta's housing starts declined 60 percent and closings declined 40 percent during the 12-month period ending in September," said Eugene James, Atlanta division director for Metrostudy, which researches residential real estate.

"The pace of new-home starts has not been this slow in more than a decade," James said. "Builders have done the right thing by cutting back on production in response to declining demand, which, in turn, is returning the supply of homes to a more balanced level."

Excess housing inventory peaked in the second quarter of 2006 and has been slowly shrinking since, James said. The supply of lots will continue to rise until starts increase significantly, which may not happen until 2010, he said.

http://www.ajc.com/metro/content/business/stories/2008/10/31/wieland_homes_economy.html