What is Sidney B. Dunmore, the former owner of now-bankrupt Dunmore Homes, thinking?
I had a long phone conversation with him about three weeks ago for the story that is running today in The Bee. My colleague Dale Kasler and I were not able to put even a fraction of what he said into the print version. But here is a lot of what he had to say during the conversation, in his own words.
On what happened to his business
It is a function of what is going on in the economy right now. We are in the worst housing crunch I have ever seen in my career. It is the worst it has ever been ... A lot of people are going through this right now. They are not at the stage we are. They are hanging on. For how long? We were the first ones in. The banks were in disbelief and did not believe what I was telling them about how bad it was, how bad it was going to get. I believe they believe it now.
The timing seemed right, but it turned out to be exactly wrong.
I expanded the business because things were doing fabulous. We borrowed to do that and all of a sudden the market turned down, and it turned down in a way that nobody foresaw.
There are a lot of guys, I won’t name names. Some others I know are in deep trouble, severe trouble. They are hanging on by their fingernails. Will they survive? I hope so.
On selling the family business for $500
We did what we thought was in best interests of company, our employees and our creditors. It was not my first choice. I agonized over that. Hell, the thing has been in my family for 55 years. The last thing I wanted to do was sell the company. There was nothing else I could do to make it work any other way.
On the origins of the family business
My dad started in 1953. It started in Orangevale. It was very rural and that is where they started. They built starter homes in a project called Kenneth Meadows, and Woodmore Oaks off Fair Oaks Boulevard. Woodmore Oaks Drive is stuff we did.
Then they started doing stuff in the south (Sacramento) area, in the late 60s and early 70s. They were down in Rancho Cordova area, all through there. All the Sunrise Countryside, Sunrise Estates, the whole Sunrise area. That is where we were located.
I started running the company in 1977. My dad retired the first time in 1980. We did fine in those times. We built the company up by the late 70s into one of the top three builders in town. There was MJ Brock and Sons of Southern California and Elliott (Homes) and there was us. We were the largest builders in town.
That was in the late 70s, a big boom time.
On what he is going to do now
That is the 64-dollar question. I do not know right now. I have got to work my way through what we are going through. I am not in charge of the company. I have the land company, two pieces of land, one in North Natomas and one in Granite Bay.
I am trying to assess what I want to do. I look back, a couple years ago in 2004, I was approached by a number of publics (publicly-traded national builders) to buy the company in very, very large numbers. I talked to my banks and employees and everybody was a little freaked out that I would think about that.
Hindsight being what it is, I should have done it and retired.
Honestly, I do not know. What I would like to do at some point is get back in and do what I was doing. I am not ready to retire. I am not a good enough golfer to go out and play golf five days a week. Hopefully, I will be able to have opportunities to do that. I have got some people who are very, very pissed off at me, but I have gotten a lot of calls of support from a lot of people .... This is a bad, bad situation all the way around. I am very upset about the whole thing, as are a lot of people.
On expanding into the Central Valley
We were thinking: where is the next area we can go to that will provide affordable housing? Where you can buy a house at an affordable price and permits and fees are not a killer.
We asked where is the next area? We looked at good land deals in Ceres. We got a great price, built there and sold half of the project to (builder) K. Hovnanian.
And then we looked at Dinuba and Fresno and Bakersfield. Those are growing communities and affordable. People were commuting from Southern California because they cannot find housing. This makes sense.
The timing was just the wrong timing. You hit timing in your business cycles. You are either low on land or heavy on cash and looking around, and now acquiring and expanding. We were in that mode, acquiring and expanding.
We had burned through land we held through the 1990s. What are we going to do next? We have to buy some or we have to expand the company. People like to work where you have a lot of land. It gives them a feeling of job security.
On not seeing the housing bust coming
We went into this in better financial shape that we had ever been in before.
We have never seen pricing drop 30 to 40 percent and sales velocity drop 50 percent. That is not a scenario anybody is building into their business.
Nobody saw it coming. None of the banks, none of the builders. Not the The Fed (Federal Reserve).
When we made decision to shut it, our subs were surprised. They wanted to keep going. I did not want to get in any deeper. I told them I did not want to owe them even more.
We owe a lot of guys money, but I am not getting nasty phone calls and hate mail. I am getting support from people. People have said Sid, you get back into it we will be there with you.
Hopefully, at the end of things I am able to come back and rise from the ashes and do what I love to do. It is not my intention to retire, that is for sure. We will see what times hold and go from there. That would be my hope, that I would be able to do that. I spent 30 years building a reputation that I thought was a pretty good reputation. It took about six months to get it smacked down.
Sacramento Bee photo (2007)
Dunmore Homes image courtesy of Dunmore Homes