Based on 2017 10K filings, the 2017 top ten publicly-traded builders captured a 25.5% share of new single-family home closings, down from 27.4% in 2016. The 25.5% share in 2017 is out of the 2017 US total of 616,000 new home sales. This count represents a smaller share of the total single-family market when not-for-sale, custom home building is included.
This series, however, reflects significant changes from the past year. CalAtlantic, the fifth largest builder in 2016, was acquired by Lennar in 2017; but the 2017 CalAtlantic deliveries are not counted in the 2017 Lennar 10K. No 2017 10K was filed by CalAtlantic.
So the top ten list compiled here does not count the 2017 CalAtlantic closings, but includes Beazer to round out the top ten.
The companies’ fiscal years vary and do not perfectly align with calendar years, but the comparison was made against their prior year 10K filings for uniformity, except for CalAtlantic.
Publicly-traded companies possess many advantages including better access to credit from their own balance sheets, economies of scale in land and material purchases as well as in advertising and land holdings.
However, small builders are better positioned to address the growth in and the knowledge of their local markets and their flexibility allows them to customize their product to meet local demands and preferences.
Also, small home building companies usually have their roots in the local market and use those more personal relationships to improve quality and increase repeat business.
The number of starts of homes built on an owner’s land, with either the owner or a builder acting as the general contractor, tallied 172,000 in 2017.
The often held small builder concern that the large national companies will take share away has not occurred. The residential construction industry remains primarily a sector dominated by a large number of small entrepreneurs.