During my workdays, I’m fortunate enough to speak with builders, architects, manufacturers and industry analysts around the country. Lately, the conversations invariably turn toward the economy, specifically the health of the luxury housing market relative to many other segments of the economy.
I’ve heard several of these industry experts say the high-end segment of the construction industry “seems practically recession-proof.” Even in these times of economic correction, slowdown, mini-recession or whatever other term is being thrown about these days, custom and luxury builders are optimistic.
But, with most of them having been in this business for decades, their optimism about the immediate future is always tempered with realism about their long-term financial health. Notice I said they use seems and practically. They are not so caught up in their present success that they don’t realize things can turn very bad in a very short time. They also realize that, like squirrels gathering food during the warm summer to get through the lean winter, they must also prepare for an economic frost while the sun is still shining.
By far the most popular way for these builders to solidify their financial footing is diversification, but diversification into areas that mesh closely with what they know so well. These custom builders are not launching catering or jewelry businesses but simply becoming more versatile within the construction industry. Luxury remodeling, rental property management and multifamily construction are popular with custom builders because they already have a strong knowledge base.
In this issue, we introduce a new section called “The Business” in which Stanley F. Ehrlich outlines alternate businesses and investments that can help custom builders not only grow their businesses but make them practically recession-proof. Ehrlich has vast experience in the building industry and is a personal financial investor, so he knows whereof he speaks.
He, like several other luxury and custom builders across the country, knows the value of versatility. In his article, Ehrlich imparts sage advice designed to keep custom builders — big and small — nimble, busy and profitable. We at Luxury Home Builder hope this information helps you, our readers, stay solvent and strong no matter which way the economy heads. We think it is information you can take to the bank.
