Churning Among Top Ten Builders

The 2013 ranking and composition of the top ten publicly-traded builders changed as Hanley-Wood released its BUILDER 100 of 2013 builder closings. The previously stable order changed the ranking of the second and third largest builders, and one new entry broke through in 2013.

2013 BUILDER 100

We estimated the 2013 big builder share earlier in the year based on SEC 10K filings. BUILDER reported the 2013 builder closings and reconciled the differences for firms whose fiscal years do not align with the calendar year. Taylor Morrison broke into the 2013 top ten, and the 2013 top ten captured a 25.4% share of the new home sales market. Lennar jumped to number two ahead of Pulte. MDC dropped a notch out of the top ten, and Ryland moved ahead of Hovnanian to six as Beazer fell to ten.

During the Great Recession, there was concern among small builders that the large national builders would capture a much larger share of the homebuilding industry, primarily through acquisitions of firms and land in newly expanding markets. Large builders have used their access to the credit markets to acquire land and achieve economies of scale in building material purchases. Large builders continue to enter new markets and expand in growing markets, with the very recent example of D.R. Horton acquiring a top Atlanta builder.

However, as throughout the industry, firms move ahead at different speeds with strategies fit to meet their business plans. The result is that the top ten share has changed very little over the past four years. While that share fluctuated within a narrow range, the composition of the top ten changed in 2013.



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