News & Press Releases

Now, more than 25 years after starting his own company, Garbett HOmes is the Wasatch Front's sixth largest home builder.

And he has built the company his way.

Instead of pushing large single-family homes that carry a large price tag, Garbett Homes has concentrated on smaller townhomes and condominiums, most priced below $200,000. Garbett is quick to point to a two-bedroom townhome at The District in South Jordan that starts at $139,900. And that includes a garage.

"We have always built multifamily homes," Garbett said. "We spent a lot of time going throughout the country and getting ideas. Then we took the best of what we found and adapted it here."

Garbett is convinced that high-density housing developments, like his, represent the future of homebuilding along the Wasatch Front. And while some homebuilders are laying off employees, Garbett Homes is hiring.

"As a young couple you used to be able to go buy a starter home," Garbett said. "You can't do that now. It's hard to find a brand new home in the Salt Lake Valley for under $300,000. If you want to be affordable, it has to be attached."

In fact, in this year's second quarter the number of closings for new attached dwellings, like townhomes and condominiums, surpassed the number of closings for new single-family product (280 versus 270), according to Newreach, a Salt Lake City-based real estate research firm which tracks new-home construction trends.

"That was the first time in Salt Lake County that has ever happened," said Jason Eldredge, vice president of sales at Newreach. "You are going to see that trend continue, but you are also going to see a number of builders targeting the $250,000 bracket for a new single-family home."

Perhaps it is Garbett's lower price points that have propelled the small builder to the No. 6 Top Builder spot along the Wasatch Front in the first half of 2008, according to Construction Monitor. Last year at this same time, Garbett Homes didn't even rank in the Top 25.

In the first six months of 2008, Garbett Homes built 116 homes at a value of $13.1 million. The average value of those homes was $113,091, the lowest average value among the Wasatch Front's Top 25 builders, according to Construction Monitor.

"I don't think that we are building more homes, but we are not building fewer homes," Garbett said. "The other builders, I think, are building a lot fewer homes."

Garbett, who also serves as the first vice president of the Salt Lake Homebuilders Association, attributes his success to a decision he made 18 months ago. At the time, Garbett sensed the market was in for a major correction.

"This is the fourth recession that I've been through," Garbett said. "We knew that it was coming eventually. We weren't sure when, so we made a big adjustment in our company. We went to higher densities in our communities and to smaller homes so that we could be at a lower price."

Garbett's strategy paid off. In late 2007 as new building permits began to plummet, Garbett Homes continued to build. The slowdown across the state was severe. In the first six months of 2007, there were 6,052 home permits issued across the Wasatch Front. Diring the same six-month period this year home permits fell to 2,133, a 65 percent drop compared to the year before, according to a report by Construction Monitor.

However, according tot the same report, permits for multi-family homes—including condominiums, twin homes and apartments—showed a much smaller decline, falling by only 14 percent in the first half of 2008 compared to the same period a year ago.

"Our focus has always been to try and build nice communities that are affordable," Garbett said. "Our main clients are young couples that have just gotten married. They have to choose between renting and buying and we're trying to make the monthly payments of buying just as appealing as renting."

With Salt Lake County rents soaring 9.23 percent in the first six months of 2008, according to a report by Apartment Realty Advisors, mortgage payments on less-expensive starter homes are becoming more competitive to renting and more appealing.

Eldredge said homebuyers still prefer single-family homes to attached townhomes, but the buying trend toward townhomes is being driven by price.

"People are buying attached housing not necessarily because they want to, but because they have to," said Eldredge, who added that homebuyers even prefer existing, older single-family homes to new attached housing if the prices are similar.

"If you are a builder offering multifamily homes under $200,000 you are probably going to do well for quite some time," Eldredge said. "The problem that we see is there is a lot of oversupply in the attached market, but it is mainly for product above $200,000. In that range you are just competing with the existing housing market."

—Dave Anderton