All in all, nearly a third of the companies on our list of 245 Housing Giants registered a 20 percent or more increase in revenue in 2018—not a bad showing for a still-recovering industry that's experiencing land, labor, and material costs eroding already thin margins.
QUICK DATA DIVE
Availability of land tops the list (68 percent) of biggest challenges anticipated by the Housing Giants in 2019, with scarcity of skilled labor coming in a close second (61 percent)
When it comes to opportunities in 2019, 72 percent of all respondents pointed to operational efficiencies as their biggest opportunity for 2019
Read more analysis and get more details in the following articles:
Last year was a high-water mark for mergers and acquisitions among home builders, from CalAtlantic’s purchase of Candlelight Homes in January (followed a month later by Lennar’s merger with CalAtlantic, combining the then-No. 2 and No. 5-ranked builders in the country) to deals by the likes of M/I Homes, AV Homes, Green Brick Partners, Century Communities, Taylor Morrison, KB Home, Beazer Homes, LGI Homes, and D.R. Horton.
And let’s not forget the foreign influx: The U.S. subsidiary of Misawa Homes Co., of Japan purchased a majority share of Dallas-based Impression Homes hot on the heels of deals between Japan’s Sumitomo Forestry America and Dan Ryan Builders, and Canada’s Empire Communities’ takeover of Texas builder Centerra Homes. But experts say the industry is on the cusp of a slowdown. Read more ...
The model of traditional home building—done outside and requiring coordination of some two dozen specialty trade contractors to deliver homes on schedule and on budget—has served the housing industry well enough for nearly a century, but its future is beginning to strain under the weight of the labor shortage, which is driving longer cycle times, rising costs, and affecting builder profitability.
And while builders are always looking for ways to cut construction costs, most aren’t ready to dive into the holistic change of prefab modular or even whole-house, off-site panelization, being more comfortable taking intermediate steps away from stick building. As a result, true disruption of the industry's status quo probably won’t be dramatic or happen all at once. More likely is that current methods and building materials will evolve incrementally ... Read more ...
In the late 1980s, Mori Hosseini, chairman and CEO of ICI Homes, in Florida, was increasingly alarmed by the pressure on his company and other midsize single-state home builders by larger production operations looking to stake claims in as many markets as possible through acquisitions. To remain viable, ICI Homes took a different course, and other midsize production builders are also finding that diversification is one viable way to compete with bigger brethren.
This diversification is almost always self-financed. And while some builders, such as ICI Homes, set up new businesses as independent entities with their own management teams and pro formas, other builders prefer to manage them like departments within their home building operations. Read more ...
The top U.S. home builders ranked by revenue, closings, and type and location of homes built. See the 2019 list
Access a PDF of these articles in Professional Builder's May 2019 digital edition