Are Women Feeling The Housing Crunch More?

The trickledown effect hits women personally and professionally.

by Carol Carter

June 1, 2008

T he trickledown effect of the slumping housing industry is affecting women business owners in the fields of interior design, marketing and public relations, and residential real estate. And it is sending more women to the Consumer Credit Counseling Service of Greater Atlanta Inc. for help.

CCCS President Suzanne Boas, in 16 years on the job, says she has "never seen demand for counseling at the level we're currently experiencing." The levels of consumer problems, she says, are "unprecedented." Most CCCS clients are women.      

Margaret Gearing, president, and Susan Frost, chief operating officer, of Atlanta-based EOS Marketing & Communications Inc., had to make the painful decision last year to take severe pay cuts to shore up their 2.5-year-old company, which – until recently – was built on a foundation of residential real estate.      

Bette Raburn, who owns The Interior Motive, a residential design studio and showroom with offices in Norcross and Atlanta, found she had no choice but to lay off several employees as a result of the housing nosedive. "I am probably one of the larger residential designer groups in town, and I had up to 10 people working for me last summer. We're down to four people."      

As further evidence of the severity of the downturn, Raburn says she receives five to six calls or résumés a week now from people looking for work. Before the downturn, if she got one per month, it was unusual. "Literally, two years ago," she says, "it was hard for me to find anybody of quality because everybody was busy."     

Residential real estate was the backbone of their company when Gearing and Frost went out on their own nearly three years ago, leaving an advertising agency where both had worked for years.      

"At one point, we were working for five different communities in Atlanta for one developer, as well as his corporate brand," Frost says. "It was big, and so when we jumped out [to form their own company] at the end of 2005, the housing market was still on fire, and, wow, 2006 looked like – what a year. Everybody hit the highest of highs, and we were out high-fiving each other, then 2007 came, and oh, my gosh."      

The first red flag for Gearing and Frost came in the form of a receivables problem. "We weren't quite sure," Frost says, "if it was a market condition or some issue with that particular community, but that was the start of it. We worked through that receivables issue and got through it, and we were like, ‘We're fine now.'" But they weren't.       

That first problem was what Gearing describes as "a pretty major receivable." The crash was coming, she says. "You could hear footsteps coming down that echoey hall. Whoa, something's going on. We started listening to it. We started seeing that what had become the backbone of the company was..."     

Frost finishes Gearing's sentence: "...very shaky..."      

Gearing picks up the thought again "...and the wheels were starting to come off the bus."      

It happened one community at a time, Frost says. "We started seeing that sales weren't happening. One by one, the marketing spigot would turn off."     

The developer had no idea what the banks were going to do, Gearing says. "It took the banks awhile to figure it out, too. We just kept looking for terra firm. Where could we put our foot on land? Something solid. It finally hit us about June of '07. We went..."      

Again, Frosts finishes the sentence: "...holy moly."        

About this same time, the two realized that traffic into the new communities was slowing down. Then, the builders began to experience a lot of cancellations. "They had contracts," Frost says, "and the people would cancel because either they couldn't sell their home or get financing."       

Ultimately, Gearing and Frost ended up with quite a sizable receivables problem. "You're trying to market them out of a hole," Gearing says. "And there are some things you can't market your way out of. It just took a minute to figure out what was going on."      

Gearing and Frost were not the only two who were nearly blindsided by the housing crisis. It took Raburn by surprise, too. "I started my business the week of 9/11, and I've had nothing but straight growth. It's been a straight climb up until the end of last year."      

Now, her remodeling business plus her niche in selecting and procuring furniture and accessories for clients is what she calls her "saving grace."     

Before the fourth quarter of last year, Raburn was working with five or six builders a month. Now, she's down to zero. Time was, Raburn says, when it was difficult to get anybody to do contracting for her. "I had six to 10 contractors I would work with on a regular basis, and they were always so booked, I would have to call them six months in advance, at least. And now, they're calling every day: ‘You got anything? You got anything?'"     

Raburn thinks the effects of the downturn are more significant than most people realize. "Appliance companies are affected. Cabinet businesses. Furniture businesses."       And Raburn's own business may yet feel more impact. "We have massive accounts receivables from builders that may not make it. We offer terms to builders, so if they can't pay, I don't get paid, and we're talking big bucks. I don't think we've lost any clients other than those that might go out of business. I talk to most of my builders on a regular basis, and they're talking, maybe, about getting ready to start something else, but I think it's going to be awhile yet."      

Teresa Sword of Heery International is Georgia chapter president of the American Society of Interior Designers (ASID). Even though she works in commercial design, her ASID position gives her an ear to what's occurring on the residential side, and she is hearing about negative impact on designers like Raburn and cuts at supplier and vendor companies.                      

Boas at the CCCS sees the effects of the downturn from the consumer standpoint. "Overall, the demand for foreclosure prevention counseling has increased very significantly," Boas says. "I think that women who are heading households are under increasing financial strain. Not only are we having problems in the mortgage market, but there are other things that are causing unusual pressures as well. Food prices are up, and gas prices are really a burden, especially for women who have some distance to commute for their work."      

Last year, across all of the services offered at CCCS – preventive education, bankruptcy counseling, foreclosure counseling, budget and credit counseling – the agency saw just over 400,000 people. "This year," Boas says, "we expect the number is going to be closer to 600,000. Since women make up three-fifths of our client base, you can see that there are tens of thousands of new women."      

If anything good is to come out of the housing downturn, Carol Flammer thinks it will be wisdom. Her clients at Cartersville-based Flammer Relations Inc. are 95 percent real estate-related. And while she says her firm has not experienced a significant drop in income, she has seen a shift. "I would like to not have had the turnover. All of 2007, we had turnover, and it looks like we're having it again in, ‘08. A lot of our builders that used to be on full-blown retainer have cut back to project work. They've got to find ways to save money.     

"In the end, those of us who make it through the transition are going to be working a lot smarter. The crisis has made us work harder, think more, be more creative, be more strategic."      

Interestingly, the business of Tonia Mann – a residential real estate specialist who works in the eye of the storm as head of Tonia Mann & Associates, a team of real estate experts – hasn't suffered greatly from the downturn.      

"I don't want to sound like a Pollyanna or make anybody else's problems seem insignificant," Mann says. "This is a tough market. But we just responded differently. We are and have become more diversified throughout the years, and we don't have all our eggs in the residential real estate market. We don't necessarily see this as a bad real estate market. We just don't see that it's the same real estate market that it was two or three years ago."     

Even though she is busier than ever, Mann notes that her Web site has been "rather quiet" for the last six months or so and says she did have to cut some of her agents. But she travels the country – and even the world – selling Georgia real estate to investors, who she says see Georgia as a very stable real estate market.      

Looking ahead, Mann predicts that it will take 12 to 18 months for the market to bounce back. She's already seeing the beginning of it. "I've already seen tremendous improvement, just in the last couple of weeks. I measure my Web site traffic as kind of a barometer of what's happening. And we are seeing triple the amount of folks coming to our Web site. That means the public is starting to become interested, and they must, at some level, be getting a little more comfortable with the economy."      

In the meantime, Mann – whose team is associated with Keller Williams Realty – says, "Your really do have to work harder in this market. There's no doubt about it. We're probably working twice as hard for the same amount of business."      

Gearing and Frost are working hard to diversify and say they have several new business opportunities in industries new to their company.      

"Being brand new entrepreneurs, two and a half years out of the gate, it's been like, wow, what challenge now," Gearing says. "But we still have our attitudes. Jimmy Buffet says," and here Frosts joins her partner to say, "If we couldn't laugh we'd all go insane."      

"The market will come back," Gearing says. "Things will be good again, and we'll move on."