BonnaVilla returning to ‘normal’ sales

A year after struggling through the depths of nationwide supply chain shortages amidst a surging sales trend, BonnaVilla Homes in Aurora reports a return to somewhat “normal” market conditions.
Plant manager Mike Morrow, now in his second year at the helm, said he is proud of how the housing manufacturing company on the west edge of town has weathered the storm.
“We went from probably the depths of major supply chain issues to starting to get out of it to now I’d say the market is definitely working its way out,” he said. “A year ago supply and demand were out of whack. There wasn’t enough supply for the demand, and now I think supply is better and demand has gone down, which is making a big difference.”
There is some good news, bad news in that transition, he noted, though it helps to look at it from a broader, historical perspective.
“The supply chain is working itself out, but it means demand is really dropping,” he added. “Demand and sales for us had been historically high a year ago and I’d say it’s incrementally gotten slower since then. You know, with interest rates, especially in the last 90 to 120 days, it’s definitely slowed down. I wouldn’t say things are terribly slow, like they’ve shut off, it’s just slower, maybe back down to normal sales levels I guess.”
Due to inconsistencies in the supply chain, Morrow said BonnaVilla didn’t make a lot of changes in its main product line, though in some cases they had no choice but to adjust.
“I think most of the changes we made in the last two years were forced on us by suppliers,” he explained. “We didn’t make a lot of product changes out of what I would call market demand, but more so based on what we could get from suppliers, whether it was appliances that we couldn’t get, flooring that was discontinued, paint that was obsolete, you name it.”
Within the last six months, BonnaVilla has begun making smaller decor changes, cosmetics for the most part, leaving the overall structure as is.
“I’d say if there is anything that in the last few years we’ve evolved to doing more of it’s residential attached housing, which would be duplex, triplex and fourplex-type buildings,” Morrow went on to say. “It’s not an apartment. It’s basically two single-family units stuck together in a duplex, triplex or fourplex. That’s become more popular and I think there is interest in building those and people owning them to rent. In some ways, unfortunately, affordable single-family detached housing is being replaced by residential attached housing in some places.”
Morrow reported that BonnaVilla has built that type of product in Aurora and the Tri-Cities area in recent years, and would like to do more.
“I think over the next year or two that’s going to be one of our focuses, really trying to get in and be more a part of some of those,” he said. “Some of them are community-based efforts to provide more housing like that. We’ve participated in some, but we’d like to do more. The Chief company, being a Nebraska-based company with a lot of different divisions, is hoping that we can participate in more of the rural Nebraska housing projects because it kind of solves a company  problem if we can be part of that.”
All that being said, Morrow said from a business standpoint, he would like to focus on what BonnaVilla does best — building single-family homes.
“Overall, it’s just really about taking what we do well, which is single-family houses, and trying to focus on that and fine tune that and get the most efficient we can at that,” he said. “As far as the product goes, that’s a part of the narrative, right, is if we can just focus on what we already do well and find ways to do more of that and do it better, that’s where our growth opportunities are.”

Smaller home trend
One thing Morrow has noticed about housing orders coming to BonnaVilla is the demand for amenities, but less square footage.
“I would tell you we’ve seen a real pivot,” he explained. “We used to build a lot of 2,000-square-foot and bigger houses and I think what we’re seeing now is that maybe because of interest rates and the material cost of everything people may be pivoting more to 1,500- to 1,800-square-foot houses.
“We’ve also seen that although people might sacrifice on some of the sizes, I don’t see a lot of sacrificing on amenities,” he continued. “Probably the most popular builds for us right now are 1,500- to 1,800-square-foot houses that have a lot of amenities.”
Rather than rolled linoleum type products that were popular in years past, Morrow said modern houses are more apt to feature luxury vinyl, which he described as basically waterproof laminate.
“We also see a lot more granite or even quartz countertops as opposed to just having like Formica countertops,” he said. “We’re also seeing more tile work than we’ve ever seen before, and not just in the kitchens, but in the bathrooms. Ten years ago we would see a tile bathroom shower in every other house or so, but I’d say the exception nowadays is to have a house that doesn’t have tile in one of the showers. So, overall, I don’t see people sacrificing yet on amenities, but maybe a little bit on size.” 

Staffing challenge
Another challenge faced during the pandemic and even after the COVID surge is finding and retaining employees. Morrow said BonnaVilla is always looking for quality workers, and now has approximately 160 on the payroll.
“It is kind of a roller-coaster,” he said. “We’re probably 10 percent lower than we’d like to be, but it’s difficult to hire and retain. Obviously everybody nationwide has the same problem, but we truly have probably the most acute problem in Nebraska. If you look at the numbers, unemployment has been one of if not the lowest levels of unemployment in the country for a while now, and that makes it tough.”
One fortunate advantage for BonnaVilla, Morrow noted, is the number of long-term employees who help create stability and what he called a core employee culture.
“Even though our staffing is not where we want it to be, because we’re struggling to hire and retain just like everybody is, I do think we are fortunate that we have a great core employee culture here,” he said. “Chief has a reputation of being a good family company and I think we have a tremendous foundational core of employees. A lot of people have been here a long time  and we definitely benefit by having that asset. This core of people that we have here is second to none. That’s huge. It really is.”