Marty Mitchell is the Vice CEO and Vice President of Land and Business Development for Mitchell and Best Homebuilders, focusing on single family home development in Washington D.C. and outlying areas. 

Having survived the slump of the early 1990’s, they were very aware of the market cycle. But no one could have predicted their present circumstances. Since 1997, the number of employees they have averaged was around 80; however, since the economic crisis, they have about 20 on staff, including 5 family members. While in a typical year, they would build between 80-90 units priced between 800K and 1 million per sale, they experienced a drop off in 2006 and presently have about 25-30 homes in inventory. They are struggling at this point to rid themselves of these "spec" units and in the process attain a breakeven point.A few years ago they experienced some delays with banks funding loans. These delays caused problems in other areas and eventually left them with a housing inventory of unsold homes that they are forced to get rid of after the housing prices had fallen 20-30%. If not for the delays, they would have been able to sell the remaining properties while their values were still high.

Mitchell remains optimistic, although admitting that this crisis is quite possibly the "Great Depression 2". "While we all expect financial dips from time to time in the industry, no one would remain in it if they knew something like this would happen."

The lessons they have learned boil down to returning to a policy of being much more conservative in their plans and transactions. Specifically, they plan to hold off buying future properties until the last minute and not be so anxious to get in there and beat the competition, but to use more caution in their dealings.

Secondly, although some of their potential projects would have caused them to stretch their building and development expertise abit, financially they would have been wiser to do them and avoid their present situation. Perhaps the profit margin would have been less, but they would not have been left with their present challenges.

As far as private investors are concerned, Mitchell insists that there are many, but they are waiting on the sidelines. "They are simply waiting for the right time to cash in of this crisis and will jump in as the market stabilizes." 

He has excellent insight when determining the best route for government intervention into the housing sector. "The government needs to make sure that the money given will end up on the streets, actually providing loans for the American public. If not, it will be money wasted." Mitchell insists that the proposed $7,500 tax credit needs to be forgotten and instead provide a $22,000, non-refundable credit to all home buyers for a year or so. Also, the government needs to expedite the funding loans through Fannie Mae, Freddie Mac and FHA making home purchasing possible with fixed rates as low as 2.99% through the beginning of 2009 and then at 3.99% for the next six months. "These loans should be available for purchasing and refinancing. While loan modifications dealing with eliminating portions of the loan balances can help, making the loan at a low, fixed rate will be far more beneficial for those who want to stay in their homes. And in the bigger picture, it is a far more prudent choice for banks since they don’t want the responsibility and liability of owning, protecting and maintaining foreclosed homes."

Mitchell also brings up an excellent point that the building industry is not about simply building a home, but providing work for thousands of individuals, "For every 1,000 homes built, 3,000 jobs are created. It’s about not only employing the construction workers, but the lenders, underwriters, appliance manufacturers, insurance brokers, technological experts etc. Stimulating the building industry will help to create jobs and ultimately stabilize our economy."

As far as software is concerned, now more than ever, they are using their Tract-PIE programs not only to re-run new projections for development purposes, but also to create realistic "if-then" scenarios for lenders who are pushing for payment and unwilling to listen to reason.

Similar to others in their industry, they are looking into multi-family housing and smaller homes on small lots. They have also dabbled in environmentally-friendly approaches to homebuilding, an area they know will be increasingly popular in the future.

Mitchell is optimistic and determined. "We will survive these next 18-24 months and will do very well at the backend."

For more information about Mitchell and Best Builders, visit their site at http://www.mitchellbesthomes.com.