Tennessee Homebuilder - Ole South Properties Lay Offs

Declining demand for housing in Middle Tennessee has spurred the state's largest home builder to cut staff from its Murfreesboro-based operations, a move that many companies tied to the real estate market have already made, experts said Monday.

John Floyd, owner of Ole South Properties, said he put off the downsizing, which pares the staff size from 33 to 25, hoping new home orders would return to levels seen in the recent boom years.

Ole South had staff in place to build up to 700 homes a year, but with actual numbers likely to be in the high-500s this year, people "just didn't have anything to do," the owner said. Next year, Floyd is conservatively estimating between 300 and 400 new orders.

"We've held out and held out, thinking the tide would turn and that home building would pick back up," Floyd said. "But now it's apparent that it's not picking up and that next year won't be picking up either."

Real estate analyst Doug Timmons agrees that the Midstate housing market isn't likely to rebound to previous levels anytime soon, but says the job growth and population surge in Rutherford County puts local builders in a much better position than others across the country.
"The strength in the regional economy bodes well for us," the MTSU business and economics professor said. "Certainly, if you're going to be in a slow-down market, you want to be in a community like this."
Timmons said builders have outpaced demand by putting too many houses on the local market and now face a period of contraction. "That's the economic cycle, and that's just the way it is," he said.
Housing permits in Murfreesboro declined by 34.1 percent through September compared to the same period last year, according to city records. The county reported a similar declines of 16.8 percent with 634 total home permits compared to the 762 the previous year.
Still, nearly 1,000 new homes and condos have been built or are under construction in the Murfreesboro.
And even though demand is down, Murfreesboro Planning Director Joseph Aydelott said it's good to have housing available for companies looking to relocate because they need housing for their employees.
"It's good to have more than a year's supply (of housing) in any given time," said Aydelott.
Karyn Beaty, the executive officer for the Rutherford County Homebuilders Association, said her members aren't panicking, they're just repositioning themselves to unload excess inventory.
"Sales agents for builders are definitely becoming a bit more aggressive," Beaty said. "But everyone knows it's important that we avoid a wholesale dumping; no one wants to see the house values go down because that hurts the whole community."
"The strength in the regional economy bodes well for us. Certainly, if you're going to be in a slow-down market, you want to be in a community like this

Homebuilder Layoffs - St. Joe Company Lays Off 80% of Its Staff

The St. Joe Company, Florida’s largest private landowner, which has been afflicted by the worst housing slump in 16 years, plans to eliminate more than 75 percent of its work force, sell about 100,000 acres of land and scrap its dividend.

The retrenchment includes cutting 760 jobs, selling 190 homes and about 1,200 developed home sites, St. Joe (formerly Arvida), based in Jacksonville, Fla., said yesterday. This quarter’s earnings will be reduced by a $30 million charge. The company will also have $7 million in severance costs this year and next.

St. Joe is shifting from building homes in Florida, where sales plummeted 41 percent in the second quarter, according to the National Association of Realtors, to developing planned communities.

“This is not a fire sale,” the chief executive, Peter S. Rummell, said yesterday in a conference call. “We are not dumping stuff on the market and we are not going to make stupid decisions, but there are things that we believe have reached their height in pricing. I firmly believe that we would be doing this whether the market was good or bad.”
St. Joe shares fell 4 cents, to $34.11.

This is another example of a Florida builder that made huge mistakes. This company owns more land than the Florida govenment...miles and miles of beach. The locals in Florida's Panhandle, or as JOE wants to call it Florida's Great Northwest hates this company. They are developing pristine plats of preserve quality land. I think they are actually a pretty "green" builder. Anyways, this one is stunning...I don't care what Peter Rummell says. Laying off 80% of your staff IS a fire sale. I am stunned they didn't at least do it in phases where they didn't need to announce it.