NVR’s Profit Margin Saving Strategy

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August 20, 2015

The fifth largest home builder in the nation, NVR is the only home builder that  didn’t lose money during the economic downturn, Fortune reports.

How did they do this? According to Fortune, the company’s debt-averse strategy played a huge role. The firm options instead of buys the land it plans to build on. 

According to Alex Barron, founder and senior research analyst of the Housing Research Center, this strategy’s main downfall is the possibility to dampen profits “if housing sales return to boom levels.”

But so far, the company has amassed billions of revenue, saw increasing home sales, an increase in stock sales, as well as being the leading builder in most of the markets it operates in, such as Washington, D.C., Pittsburgh, and Philadelphia.

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