Retiring home builder sees new era for Arizona’s housing industry

Posted By Mike Padgett

Jan. 15, 2009

A new career for the new year is how homebuilder Dave Bessey started 2009. The day before, Dec. 31, he was cleaning out his desk. Bessey’s shift as president of Maracay Homes was over, and he was leaving his office for the last time. He even took home the desktop glass globe filled with water and occupied by two shrimp and their tiny food plant.

Bessey’s departure from Maracay Homes at the end of 2008 was part of the deal he and his five partners negotiated in 2006 when Weyerhaeuser Real Estate Co., a subsidiary of Weyerhaeuser Co. in Seattle, bought Maracay, a privately-held company with headquarters in the Scottsdale Airpark.

Details about the sale of the private company were not disclosed when the deal was announced in 2006. Bessey declined to discuss the sale’s financial details, citing a confidentiality agreement. Weyerhaeuser is conducting a national search for Bessey’s replacement. In the meantime, Maracay’s interim president is Dale Sowell, who could become Bessey’s replacement.

Bessey said that after the no-compete clause in his contract expires at the end of 2009, he might return to building new homes in Arizona. But for the next 12 months, look for Bessey to focus on his investments in Canada and Central America.

Bessey was a partner, president or owner of construction companies in Canada before he moved to Arizona in 1991 to help incorporate and launch Maracay Homes. He was one of its founding partners, and in 1996 he became its president. Since its inception nearly 18 years ago, Maracay has added more than 6,000 new houses to the Arizona landscape.

During his last interview on his last day as Maracay president, Bessey shared his thoughts about his future as well as the future of homebuilding in Arizona. He was adamant that he will never retire. He plans to remain active in business, which involves his investments in two resorts in British Columbia and Ontario, and investments in land in Costa Rica and Panama.

Bessey sees the Flex Design concept as one of the company’s most important achievements. In 1997, Maracay spent about $150,000 on market research that showed prospective buyers wanted more choices of house designs. That led to Maracay’s creation of the Flex Design, which allows buyers to make modifications in the company’s house designs to fit their lifestyles.

Most homebuilders offer small changes allowing them to enclose a den to create a bedroom, or convert the garage into a bonus room. Maracay took that flexibility in design to the next level. It led to “this free-flowing idea of how we could take a basic floor plan and morph it into a totally different house inside,” Bessey said.

The Flex Design enables buyers to choose two large bedrooms, or convert that space into three small bedrooms, or into two regular bedrooms and a small media room nearby. Other options included expanding the footprint of the house by two feet or so, adding basements or a second floor.

Critical issues facing homebuilders

Homebuilders in Arizona are facing several challenging issues that Bessey says will change the industry. They include the current decline in Arizona’s population growth, a growing concern about urban sprawl, and the impact of rising fuel prices on commuters’ budgets. Builders also are seeing less interest in retirement communities and more interest in working past retirement age.

Starting in the early 1990s, “a lot of what was driving the Arizona economy was people moving into the state,” Bessey said. “At one point a couple of years ago, it was up to 150,000 people a year moving into the state. That drove the need for housing, whether resale or new. It was a huge need.”

That enormous annual wave of new residents carried with it many new jobs. But as the economy lost strength, Arizona’s population growth stalled, as did jobs growth and the sales of homes, whether new or resale.

“In-migration has slowed to a trickle,” Bessey said. “Part of that is, I think, people can’t sell their home where they are, their exit home, to be able to move to Arizona, even though they probably would like to. That’s a big factor that’s going to affect homebuilding.”

Bessey adds that other negative factors hurting home sales include changes in mortgage regulations, the subprime meltdown, and the disappearance of seller-assisted down payment programs.

On the other hand, for first-time buyers with cash and good credit, “it’s the perfect time to buy,” Bessey continued. “Interest rates are low, and prices haven’t been this low in 10 years. “So it’s a great time to buy, but there are no buyers.”

Also suffering are those homeowners who in recent years converted their homes’ rising equity into cash through second mortages or home equity loans. Today, because home prices have dropped significantly, those homeowners are “under water” or “upside down” because they owe more on their loans than the market value of their homes.

“You may still be working, you can make your mortgage payment, you can make your second mortgage payment or your home equity loan payment, but how do you sell your home to buy a new one when you’re upside down?” Bessey said.

Maracay’s team concept

Bessey added that Maracay’s achievements while he was president were a team effort. “I didn’t do this myself,” he said of the company’s success. “I had great people working with me. If you have the right people, then you can create the right deal. And if you have the right deal and the right people, you can find the money. But the people are still the most important part.”

While he was a partner and later the president, Bessey could be found almost every day in the Maracay offices in Scottdale Airpark. “This has been a huge part of my life that I’m going to step away from,” he said, “and the question is, how do I fill that void with all that time.”

His investments in Canada and Central America will require some of his attention, he added, “but I’m worried they won’t be as fulfilling as what this (Maracay Homes) business has been.”

Retirement ranks low on Bessey’s priority list. In addition to his investments, he plans to look for more opportunities. That search could involve another homebuilding company in Arizona, starting in 2010.

“I’m only retiring from Maracay because my contract (related to the 2006 sale of the company) terminated,,” he said. “I can’t picture myself retiring. I always said I would never retire.”

Bessey can be contacted through his e-mail,


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Jan 15th, 2009

One Comment to 'Retiring home builder sees new era for Arizona’s housing industry'

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  1. Laura Jordan said,

    Mike: so glad to know where you are and what you are doing.
    Dave purchased a hotel in Canada…fyi.
    Nice story…

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