The Housing Chronicles Blog: Big homebuilders marketing their staying power to buyers

Wednesday, April 2, 2008

Big homebuilders marketing their staying power to buyers

I got a call yesterday from a reporter for Bloomberg News, who was writing about large, public homebuilders in the Chicago area taking out display ads that focused on their financial strength to last through this housing recession. It's certainly a good idea to do so, especially if you consider that bankrupt builders can't address warranty issues or answer customer service phone lines. For more sophisticated buyers, they could easily peruse the financial filings of public builders through annual reports and quarterly SEC filings, which are often available on their websites under "Investor Relations," not to mention reading various analyst reports by conducting various Internet searches.

But it also occurred to me that buyers should also consider just how good that customer service is, as well as building quality, design and dealing with in-house mortgage operations. Thankfully, each year the research firm JD Powers comes out with its builder rankings -- something which a top-ranked builder such as Centex pays six figures per region to JD Powers for the right to broadcast their rankings to potential buyers. However, if you want to see which builders performed the best on the 2007 rankings, you can simply visit their website for more details and which builders topped the list for various regions.

From the September 2007 press release:

Even in the midst of a downturn in the housing market, Centex Homes receives the Platinum Award for Excellence in Customer Satisfaction and ranks highest in 14 of the 34 largest home-building markets in the United States—more than any other new-home builder in 2007—while Pulte Homes, including its Del Webb and DiVosta brands, ranks highest in 11 markets, according to the J.D. Power and Associates 2007 New-Home Builder Customer Satisfaction StudySM released today...

Besides Centex and Pulte, other builders topping market rankings include: David Weekley Homes (which ties with Centex in Austin); Granville Homes (headquartered in Fresno, Calif.); Huntington Homes (Dallas, Texas); Mattamy Homes (Oakville, Ontario, Canada); Shea Homes (Walnut, Calif.); Standard Pacific Homes (Irvine, Calif.); Tim Lewis Communities (Citrus Heights, Calif.); Van Metre Homes (Washington, D.C.); and John Wieland Homes (Atlanta, Ga.).

Overall, customer satisfaction levels have remained steady since 2006. Markets experiencing the largest customer satisfaction improvements include the Central Valley, Calif.; Jacksonville, Fla.; Minneapolis; and Nashville...

Centex Homes ranks highest in 12 markets, while Pulte Homes ranks highest in eight markets. For more information on New-Home Quality Study rankings, please click here.

The study results include the following key findings:

  • Overall, home quality has improved since 2006. The typical new-home buyer reports 13 problems with their new home in 2007, a 7 percent decrease from 2006.
  • New-home buyers in Minneapolis report the highest new-home quality levels—averaging 7 problems per home—while new-home buyers in Washington D.C. report the lowest quality with 19 problems per home, on average.
  • The four problem areas that detract most from home-buyer satisfaction are: sidewalk, driveway and foundation cracks; crooked walls; visible carpet seams; and landscaping.

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