Archive for the ‘Floor Plans’ Category

Firms of the Builder 100 Primed for Growth

The firms of the Builder 100 and Next 100 rise above the challenges of 2013




NAHB chief economist David Crowe notes in his “Small Vs. Large” analysis that the average NAHB single-family builder “has 10 employees, builds 27 single-family homes in a year, and has an average annual volume of $4 million.”

And—just as society has its 2 percent—so, too, does home building. Welcome to one of our crown-jewel annual projects, the Builder 100 and Next 100, compliments of the teams at organizations who produce, market, and settle on more than half of the nation’s new homes every year—a number that is growing, and, we expect, will keep growing.

The list itself and what it quantifies belie the work, the cleverness and creativity, the skills, the boldness, and the sheer force of will and resilience among the teams of people behind the titles of the 200 companies in our survey universe. We’ve profiled a few of the fastest growers on the next seven pages and provided related market data from Metrostudy, Hanley Wood’s research arm.

Last year’s primary driving mechanism was investors’ need for yield opportunity, which poured liquidity into absorbing distressed inventory in huge gulps, giving home builders two long-awaited and critical bases to work off. One was stabilized and upwardly mobile house pricing, a strong signal to discretionary buyers that the moment had come to move off the sidelines and into the pursuit of that dream home. The second was a sense of urgency, which had been absent since about the time Hurricane Katrina wreaked havoc in the Gulf in 2005. In 2013, bidding wars over properties actually broke out like hockey skirmishes that pitted potential owner-occupiers against one another and against investor buyers, and the scarcity of inventory took care of the rest.

People wanted what there wasn’t a lot of, and that played into the hands of the big, and not so much the little, home builder. Why? Money. Big builders’ one material advantage over the broader market in the past year was capital muscle. If you had lots and a reserve of cash to invest to build on them, you did well. If, as in “normal” housing cycles, you needed to access financing to acquire lots and structure project loans, you didn’t do well.

This year’s Builder 100 and Next 100 builders, roughly the equivalent of American society’s 2 percent, accounted for more than one out of every two new homes sold (53.1 percent) in 2013. The “200” consolidated gains coming out of the downturn into the early stretches of recovery. While the broader new residential construction community accounted for a year-on-year jump of about 13 percent, to a total of 430,000 new-homes sold, our community of home building’s 200 biggest players rocked a 24 percent increase on an absolute jump of 43,968 homes.

For 2013, the minimum barrier to entry into the vaunted top 100 ranking was 406 homes. That’s a 27 percent hurdle to have cleared versus the minimum number of 2012 units, and eight companies made that leap with aplomb: Eastwood Homes, American West Development, AV Homes, TRI Pointe Homes, The New Home Co., The Providence Group of Georgia, Dunhill Homes, and Robson Communities. We salute them and welcome them to the show.

And don’t say there weren’t challenges in 2013. Let’s name a few. How about credit, both for builders and buyers who need financing to go through with their purchase? Arguably, the pendulum of risk-aversion had swung to an unheard of extreme, which made extracting acquisition, development, and construction lending and a 30-year fixed-rate loan for someone with a normal credit rating a have-fun-trying experience. What about labor? What about entitled, approved, and developed lots? What about the Fed taper, introduced with such finesse by former chairman Ben Bernanke mid-year? And how about that little interruption in all government activities that occurred during the first two weeks of October?

That’s not to mention chronic issues like flat-lining household incomes, lumpy geographical recoveries, and a growing mismatch between job openings and individuals with the required skills.

If builders could do what they did despite the challenges, shocks, and impediments of 2013, they’re apt to be able to do themselves one better this year. They’re looking beyond the external forces at their internal mechanics, people, process, and programs. They’re improving as they go, which is what home building’s 2 percent is all about right now.


By  with Builder on May 9, 2014

Twice as Many Consumers Prefer New Homes to Existing

Larger closets, open floor plans, and roomy kitchen islands seen as big draws of new homes.


While twice as many American consumers prefer a newly built home compared to an existing dwelling, many are reluctant to pay extra for new, according to the results of a new survey from Trulia.

Forty-one percent of respondents said they prefer to buy a new home over a previously lived in one, compared to 21 percent who said they would prefer an existing home at the same price. But of those buyers interested in new homes, only 46% were willing to pay the 20% premium that new homes typically require. In fact, only 17% of respondents said they would pay at least 20% more for a new home.

Trulia compared median prices for a new home adjusted for property features and location and found that new homes are typically priced 20% higher than older homes with similar attributes such as square footage and number of bedrooms in the same zip code.

The survey explored consumer preferences for each type of home. The top reasons respondents prefer a new home are for modern features such as bigger closets, a kitchen island, open floor plan, walls pre-wired for flat screen TVs, radiant floor heating, to be able to customize the home before construction is completed, and to spend less on maintenance and repairs.

Fans of existing homes have their reasons, too. The most compelling reason to buy an existing home is to pay less. However, among respondents who strongly prefer an existing home, the top reasons to buy an existing home are for one-of-a-kind finishes such as original wood floors, woodwork, ornate details, or stained/leaded glass windows, and to live in a more established neighborhood.

Interestingly, respondents are much more likely to mention the neighborhood as a reason to prefer an existing home than as a reason to prefer a new home. This suggests that for many Americans, the ideal home might be a new home in an established neighborhood, the survey concludes.

By  – Builder Online – May 5, 2014