BUILDER 100 SURVEY SHOWS BIGGER IS NOT BETTER

Boyce Thompson
Hanley Wood
bthompson@hanleywood.com
202-736-3377

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The top 100 home builders in America lost share to the home building market as a whole in 2008, according to the results of Builder magazine's annual Builder 100 survey, released today on Builderonline.com.

"Bigger was not better for home builders last year," said Boyce Thompson, editorial director of Builder magazine, which has been conducting the survey of top builder closings since 1984. "The biggest builders, who largely do business in suburban subdivisions, were victims of the credit crunch and flagging demand."

The top 100 companies closed only 227,000 homes last year, down 37 percent over 2007. That represents 38.7 percent of the industry's 586,000 closings in 2008. The total closings number comes from combining government figures for single-family and condominium sales. The high-water mark for Builder 100 market share was 2006, when the top 100 builders commanded a 43.6 percent share of the market.

Though access to credit has crippled builders of all sorts, it has been less of a problem for smaller builders who build homes for a fee. These builders often depend on homeowners to finance custom homes.

The biggest builders also do a disproportionate share of business in markets such as Florida, Nevada, and California that have been hit hardest by the housing recession. And many have been troubled financially by acquisitions and expansion undertaken during the housing boom.

The typical Builder 100 company closed 2,269 homes last year, a 29 percent decline, and recorded $695 million in revenue, a 31.5 percent decline. The top 10 builders in the country accounted for only 22.7 percent of sales last year, down from 25.7 percent in 2006 but still above levels recorded in the early part of the decade.

In addition, public builders lost share to private companies. Public builders accounted for 27.3 percent of sales last year, compared to 29.3 percent the year before.

Ft. Worth-based D.R. Horton remained the largest builder in America last year, closing 23,915 homes. It was followed by Pulte, with 21,022 homes. Pulte jumped from fourth to second on the list of biggest builders.

Shea Homes regained its position as the largest for-profit private builder, with 3,225 homes closed in 2008. It was followed by David Weekley Homes (3,213) and The Villages of Lake-Sumter (2,238). For a complete list of the largest builders in America, ranked by closings, go to Builderonline.com.

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