Tough housing market? Just read the signs

Wednesday October 31, 2007 12:04 am EDT

Not all intown development is booming, Atlanta.

According to statistics from the Greater Atlanta Home Builders Association, consumer confidence in September – even with prices low – dipped to its lowest since 2003 and is trailing slightly below the national average. Single-family building permits dropped from 57,500 this time last year to just under 39,000.

Infill developer Forrest Homes declared bankruptcy earlier this year. Beazer Homes, an Atlanta-based home builder, released less-than-glowing results for the third fiscal quarter in 2007, reporting a net loss of $123 million and total revenues $439 million below those of the previous year.

Many builders are either "declaring bankruptcy or moving to greener pastures like Charlotte," says Chris Burke, vice president of government affairs at the Greater Atlanta Home Builders Association. He says membership in the group has fallen to 3,700 in the last 10 months – a stark contrast to its peak of 4,100 in his eight years with the organization.

Burke says companies such as Beazer can often sustain such blows because they're publicly traded – the smaller private businesses usually have a harder time.

JLW Homes and Communities is one builder that continues to press on, although it seems to be fighting two battles – the rough business climate and angry customers. Founded in 2000 by three college pals named Komichel Johnson, Robb Jones and Greg Wynn, the company has been considered an upstart success story. The company primarily focuses on new developments, banking on revitalizing downtrodden areas such as Cleveland Avenue and Metropolitan Parkway.

Preston Hills off Old Hapeville Road, a JLW community, opened for business in 2005 and offered single-family craftsman-style homes starting at $250,000. But residents there are complaining about a long-standing lack of warranty repairs. Angela Wilborn, the first resident to move into the neighborhood, has taken her battle to her lawn, scribbling angry posters deriding the company and staking them in her grass.

The list of warranty concerns – which have been left unfixed more than a year, say some residents – runs long: leaky pipes, sinks propped up on wood, cracked hardwood floors, promised ornamental mailboxes still undelivered. But the concern over silence from the company – in the form of phone calls unanswered and e-mails unreturned – has trumped the annoyance residents initially felt.

"I'm not angry about the building quality," says resident Endre Brown. "I know that mistakes are made when you build a house and that they'll get fixed up. But you don't hear from these folks. We pay $250,000 for a home and then it's like they vanish. We just want a little communication."

Jones, one of the founders, says it's a tough market and his company is trying to keep afloat. "I understand their frustration, but at the end of the day, every builder in town is struggling," he says. "It's like, 99 percent of the builders. You've got businesses declaring bankruptcy."

For now, residents feel lost in the mix. Concerns about rising insurance rates because of the rash of break-ins compounded with decreases in property values are paramount – the undeveloped remaining phases in the neighborhood sit vacant and overgrown. Susan White, JLW's vice president of marketing, says the company has no timetable for when construction on those sites will push ahead. When CL visited the sales office in the neighborhood last week, movers were emptying it.

Residents are left wondering what comes next. Jones, who says the claims aren't as severe as residents claim, says he's fighting to make things right. He says he's paying out of his own pocket for many of the warranty repairs in a time when other businesses are calling it quits, skirting out of town, or waiting for the housing market to pick itself back up to come back and restart business under a different name.

"I don't want these people to be dissatisfied with their homes," he says. "We're not quitters. We're not going to bankrupt this company and this name. I don't know how your parents raised you, but mine told me to be honest and have integrity. Leave these people with warranty claims? I'm not going to do it."

The residents say they're not letting up, either. And as of this writing, the sign stands.

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