Regional review: the Southwest led all regions in 2002 despite weather and economic challenges - Top 50 Builders

Pool & Spa News, Sept 5, 2003 by AmyJo Brown

Around the country, pool builders mostly prospered in 2002 despite a whirlwind of weather and economic difficulties that buffeted other industries.

All regions saw at least several million dollars gained in revenue over 2001, both in construction and retailing divisions.

But the Southwest was the most profitable of all with about $200 million more in revenue than its closest competitor, the West.

"Even with all the troubles in the world like layoffs, unemployment, war and drought, our business never really slowed down," says Run Yates, president of Aquatic Pools Inc., in Rio Rancho, N.M.

Part of that may be because builders have been making the most out of each project with add-ons such as waterfeatures, fences and cabanas. And many top pool builders are partnering with home builders and landscapers to complete mole jobs, especially in the Southwest.

Of course, weather played a large part in the industry's success. Last year ranked as the 14th warmest on record in 108 years of national records, according to the National Oceanic and Atmospheric Administration. Summer temperatures tied with those of 1988. Only the summers of 1936 and 1934 were hotter.

Here's a look at the individual regions:

Southwest

With a record warm summer and persistent drought, Southwest builders did all they could to cool off customers. They built a total of 8,076 pools--1,500 more than all the other regions combined--and raked in more than $347 million in sales in 2002, up from about $343 million in 2001.

"Despite lack of consumer confidence and an uncertain economy, low interest rates increased home sales, and new construction afforded us a surprisingly strong year," says Ed Ast, CEO of Shasta industries in Phoenix.

The average price of pools built in the region was approximately $32,000. Builders say that because of the economy, the average has gone down compared with previous years. "We were doing pools for $80,000 to $120,000 and now I'm selling more $25,000 to $35,000 pools," says Keith Zars, owner of Keith Zars Pools, located in San Antonio.

Sandy Vallentine says it was the decline of the region's technology sector, specifically, that brought about a decline in higher-end pool "The trend is going to continue," predicts the president of Ocean Quest Pools in Austin, Texas.

To appeal more to middle-class home buyers, many of the Southwest builders are partnering with custom home builders.

West

In the West, the housing market thrived last year, with California capturing 10 percent of the nation's overall housing starts. That helped drive the pool industry, which steadily increased its sales from approximately $163 million in 2001 to around $186 million in 2002. Also helping the profits, say builders, was noticeable consumer interest in extra pool features.

"Last year's projects continued to be more intricate as people invested in their homes and families," says Bruce Dunn, CEO of Mission Pools Inc., in Escondido, Calif.

"The buyer was willing to pay more for what they wanted," agrees Rick Legnon, CEO of Advanced Pools in Rancho Cordova, Calif.

The 12 top-ranking builders based in the West (all but two are in California) built a total of 3,327 pads. Average pool price: $47,000.

Midwest

Mother Nature was not kind to the Midwest in 2002: First there was extreme drought, alleviated only by flooding that caused hundreds of millions of dollars in damages to local economies. Approximately 277,000 housing units were started, and an average of 616 pools were built by the region's top builders.

As Keith Hoskins, CEO of Olympic Pools in Fort Wayne, Ind., puts it, "Demand seems strong, but it could've been better with some good weather."

Still, the region didn't do so shabby, with Midwest builders bringing in nearly $10 million more in 2002 sales (at $80 million) than they did in 2001. That may be because, unlike many business owners across the country, these top builders didn't hesitate to spend on business improvements and to expand into other areas of expertise.

"There's a demand for more elaborate and intricate pools," says Dale Overson, owner of Barrington Pools in Barrington, Ill. "We expect this trend to continue and our company's ability to mold and change according to the changing demand."

Part of keeping up means restructuring operations to keep up with growth, adds Michele Des Rochers, "We expanded our warehouse and retail size, revised our marketing efforts and partnered with a local minor league baseball ream," says the owner of Des Rochers Backyard Pools, located in Wilmington, Ill.

Northeast

Top builders in the Northeast constructed an average of 1,309 pools each in 2002, earning them $64.7 million in revenue--up from $61.7 million in 2001. A large part of the profits reflect the trend of integrating pools into backyards more thoroughly, the builders say.

"There is a bigger demand for more pools with waterfalls, waterfeatures and landscaping," says Bob Landon, president of Maryland Pools & Spas in Columbia, Md.

The landscaped pool projects of Andrew Everleigh, CEO at Environmental Pools Inc., in Chelmsford, Ma., was even featured on PBS' "This Old House."