About 20 years ago, it was fairly common for home builders
to have close relationships with outside mortgage lenders. This was done for two reasons: to streamline the financing process for their
buyers, and to bolster their competitive position by offering various
incentives for using these affiliated lenders.
Throughout the 1990s, most large builders figured out that bringing
these operations under the corporate umbrella – including in-house title and
escrow services -- could make the process even more efficient, while also
adding more revenue streams to the bottom line.
Click here to read more
Showing posts with label D.R. Horton. Show all posts
Showing posts with label D.R. Horton. Show all posts
Tuesday, January 22, 2013
About Those New Qualified Mortgage (QM) Rules...
Friday, May 8, 2009
A return of homebuilding stocks?
Although it may still seem way too early to call for a rebound in housing stocks, a writer for Fortune magazine argues that there are some early signs that *some* homebuilders might be worth a look. From the article:
Is it finally time to buy homebuilder stocks? The basic math of the real estate market is now working in favor of an industry that, believe it or not, has done a remarkable job paring costs and harboring its financial strength for the recovery that's now dawning.
The two main bellwethers for housing's future - the supply/demand equation and affordability - are both pointing towards a recovery. The timing is impossible to predict, though the best guess is that home sales will stage a resurgence beginning late this year or in early 2010...
Fundamental demand is driven by household formation, which in turn depends on two factors: the rate of immigration and the number of Americans entering the labor market. Distilling all the data, the Congressional Budget Office reckons that new households can absorb around 1.5 million new houses, condos and rental units a year...
Since the number of new homes and apartments now isn't nearly big enough to accommodate the immigrants and young workers crowding the labor force, residents are buying and renting the existing units (albeit at a slow pace). That's driven the excess inventory down to less than 900,000 units. At the present slow pace of homebuilding, the glut will disappear by the end of 2009.
The other force behind the housing rebound: Call it the "New Affordability." According to the most recent Case/Shiller data, prices in many of the bubble markets have fallen at least 40% from their peaks. The declines are drawing people out of rental and into the home-buying market...
D.R. Horton (DHI, Fortune 500) America's biggest homebuilder specializes in the market's sweet spot: starter homes for first time homebuyers. Those customers don't need to sell their existing home to buy one of Horton's - they typically move straight from a rental...
Toll Brothers (TOL) At first glance, Toll would seem an unlikely pick since it specializes in mass-produced, luxury market of homes at $600,000 and up. But the stock is selling at a substantial discount to its peers (based on price-to-book-value)...
Meritage Homes (MTH) Meritage derives half its sales from Texas, one of the fastest growing states in the country. It's shrewdly changing its specialty from almost $300,000 send-and-third move up homes to starter houses priced at around $200,000...
Tuesday, March 17, 2009
Top 10 builders for 2008
You've probably heard most of these names before -- D.R. Horton, Pulte, Centex -- so it's probably not difficult to imagine that they've all made the Builder magazine's Top 10 list of the country's biggest builders in 2008 (albeit in a concentrated form). But what's interesting is that some of them have taken advantage of the marketplace and switched places. From a BuilderOnline.com story:
Nearly all of them reported a steady stream of record-breaking losses, as the home building market went from bad to worse. The Census Bureau reported that new home sales fell 38 percent last year. Our survey reveals that sales among the top 10 builders declined by a nearly identical amount.
The depressed sales environment forced the top 10 builders to play some serious defense. They retreated from marginal markets; sold off land at discounts; continued personnel reductions; cut expenses; and struggled to regain profitability.
The top 10 worked overtime to generate cash flow and allay investor concerns that they could not meet debt obligations. Unlike many builders in the second tier of the Builder 100, the top 10 all managed to stay in business thanks to long-term debt financing. Even companies reporting the biggest losses stockpiled large cash reserves that they hope to one day deploy to fuel growth.
The country’s biggest builders are now shadows of their former selves. In 2005, the top 10 builders sold 289,354 homes. Last year, they closed only 132,994 homes, a 54 percent decline.
Thursday, August 7, 2008
Public builders report more losses, announce action plans
Fights with analysts! Poison pills! New promotions to sell homes! Yup, it's reporting season for the public builders, with an interesting wrap-up at builderonline.com:
In a move that could become common among home building companies desperate to preserve tax write-offs for their operating losses, Hovnanian Enterprises has installed a poison pill provision that would dilute the company's stock in the event that an outside entity purchased 4.9 percent or more of the company's outstanding stock...
If the U.S. government's $7,500 tax credit is intended to lure would-be first-time home buyers off the proverbial fence, Pulte Homes has a plan that will all but yank them off of it. Beginning tomorrow, Aug. 5, the company is rolling out a new sales campaign that will allow first-time buyers to double their tax benefit...
Emotions ran high today during D.R. Horton's fiscal third quarter conference call, as CEO Don Tomnitz spoke passionately to analysts about his company's performance, his feelings on the recently passed housing legislation, and management's stubborn commitment to spec building.
Friday, April 25, 2008
Sneak peek at the Builder 100 for 2007
Although public builder D.R. Horton retained its status as the #1 homebuilder by closings, private builder David Weekley homes surpassed Shea Homes for the first time as the top for-profit builder not publicly owned. From a BuilderOnline.com story:
Stop the presses: David Weekley Homes eclipsed Shea Homes as the biggest private for-profit builder in the country last year, according to Builder magazine’s Builder 100 survey. Companies in Builder magazine’s annual Builder 100 list, to be released online in early May, are ranked by closings...
Shea remained the largest private builder in terms of revenue, with $2.15 billion in revenue, followed by Weekley at $1.34 billion, and the Related Group, a Miami-based condominium builder, at $1.257 billion...
Company | Pct. change (v. '06 closings) | '07 Closings | '07 Revenue |
Horton | -29% | 37,717 | 10,171 |
Lennar | -33 | 33,283 | 10,187 |
Centex | -18 | 30,684 | 9,732 |
Pulte | -34 | 27,540 | 9,263 |
KB Home | -28 | 23,743 | 6,417 |
Hovnanian Enterprises | -26 | 14,928 | 5,334 |
NVR | -11 | 13,513 | 5,129 |
Beazer Homes | -35 | 11,366 | |
The Ryland Group | -33 | 10,319 | 3,033 |
MDC Holdings | -38 | 8,195 | 2,933 |
Most Builder 100 companies recorded a double-digit decline in sales last year. Condo builders bucked the trend. The top 10 condo builders on the Builder 100 did about the same business in 2007 as they did in 2006.
For the second consecutive year, Miami-based Lennar Corp. topped the For-Sale Condo list, closing 3,136 units. Lennar was followed by The Related Group (2,082), MCZ Development (1,735), Epcon Communities (1734), and Centrum Properties (1,657), all condo specialists.
Virtually all of the The Related Group’s closings were in Miami and Ft. Lauderdale. Centrum Enterprises, which closed 691 for-sale condos in Miami last year, plans to enter two more states next year. Epcon projects that it will do even more condo business in 2008.
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