Last year, the 50 largest metro markets ranked by new-home closings saw those closings increase 11.9 percent over the top 50 markets in 2011, to 218,571 units. That count represented 57.6 percent of all sales of new single-family homes and multifamily completions nationwide. And nearly three-fifths of the closings in those 50 markets—130,988—were transacted by their respective 10 largest builders. These Local Leaders generally grew at an even faster pace than their housing markets did, increasing their closings by an aggregate 21.1 percent over BUILDER’s Local Leaders list in 2011.

Our 2012 ranking reflects an industry on the mend, and one where public and national builders continue to dominate in many regions. In 27 of the 50 metros on our list, one of the industry’s five largest builders—D.R. Horton, PulteGroup, NVR, Lennar, and KB Home—is ranked as No. 1.

Typical of how individual builders exceeded their market’s sales velocity was Houston, once again the country’s top housing market with 19,317 closings. That was a respectable 12.5 percent gain over 2011, but considerably below the performance of market leader Lennar, whose 1,977 closings were 36.2 percent higher than in 2011; or the 20.3 percent gain in closings achieved by No. 2 builder Perry Homes.

The big guys tightened their grip on several markets, including Washington, D.C., where NVR closed 2,060 homes in 2012—447 more than the previous year. NVR now also captures nearly half of Pittsburgh’s annual closings after its acquisition of that market’s No. 2 builder, Heartland Homes.

In Phoenix, PulteGroup closed 300 more homes than it did in 2011, and Taylor Morrison closed 250 more than in 2011. And with the exception of hometown builders Harmony Homes and American West (the latter of which went through bankruptcy protection last year), the publics have a stranglehold on Las Vegas, which finally shook loose from its foreclosure nightmare to generate a 31.3 percent increase in closings to 5,169 homes.

Regional/Local Builders Prosper

Big-builder hegemony, though, wasn’t monolithic across the country. There are still markets that the giants, for reasons that usually revolve around population density and competition, choose to avoid or just dabble in. Their indifference leaves the door open for regional and local builders to step in and prosper.

Take Colorado Springs, Colo., where but a sole public, Richmond American, is among the top 10 builders. Three-year-old Saint Aubyn Homes quickly has gone from upstart to market leader, having doubled its closings there in 2012 to 344 units.

Owner Jared Saint Aubyn attributes his company’s rapid growth to two factors: its subcontractors and its employees. “There’s a bit of a labor shortage in Colorado,” he told BUILDER, “so we laid out our plans for our trade partners and got total buy-in from them. We also got the right people on the bus in our sales and construction departments. We had to hire a few of them, but mostly they were people who we already had in place.”

Saint Aubyn Homes last year introduced a higher-priced—$350,000 to $500,000—product, as well as new house plans, which allowed it to pick up margin on its sales. It currently builds in eight communities in southern Colorado and is counting on similar results from communities in northern Colorado, where Saint Aubyn Homes started building in 2011 and where it tripled its closings last year.

El Paso, Texas, is another market where public builders are bit players. Total closings there last year inched up by only 2.5 percent, but that didn’t stop CareFree Homes from catapulting into the top spot with a 68 percent increase in closings to 400 units, giving the company a 15.4 percent share of market.

Chris Dent

When Shawn Gray took the reins as CareFree’s president in 2010, following management stints at Atreus Homes in Albuquerque and T.W. Lewis in Phoenix, he found El Paso’s housing scene “behind the times in innovation and design.” He set out to transform CareFree’s operations, processes, and products, which last year included introducing new floor plans for entry-level and move-up buyers. In 2013, the builder is expanding its portfolio to include semi-custom homes, a niche from which Gray thinks his company can generate 30 to 50 closings per year.

CareFree Homes builds in a dozen communities where its houses range from 1,258 to 3,364 square feet and are priced from $125,950 to $289,950. Because sales were stronger than expected in 2012, CareFree went through a lot of finished lots. “We have a substantial land position, but we also buy lots from developers,” Gray says.

Like other builders in El Paso, CareFree is waiting for the local land development pipeline to catch up with demand. Consequently, the builder expects closings to recede to around 350 homes this year, but then to bounce back “incredibly” in 2014.

And to sustain his company’s competitive edge, Gray says CareFree is working with local and national suppliers to bring in building and decor products “that have yet to reach El Paso.”

New Leading Markets

In San Jose, Calif.—which with Boise, Idaho, replaced Huntsville, Ala., and Detroit among 2012’s 50 largest housing markets—O’Brien Homes elbowed its way past KB Home as the metro’s No. 1 builder. Its 135 closings captured 9.5 percent of share in the San Jose-Sunnyvale-Santa Clara metro area.

Since 1976, O’Brien has built more than 4,000 homes in the nine-county San Francisco Bay Area. It’s currently building out a 242-home site community in Sunnyvale called Fusion, where its condominiums range from 1,198 to 1,882 square feet and start in the mid $400s.

The builder also has property in the North Bay’s Solano County, where it’s building out 49 3,000-square-foot lots for single-family detached rentals that will range from 1,400 to 1,900 square feet.

But owner Dennis O’Brien, who turns 72 this year, says he’s winding down his home building business to focus on developing land to sell to other builders. In April, he was processing an East Bay area site for 300 apartment units, and another piece of vacant land there with 75 single-family lots. A third property in Walnut Creek, Calif., is entitled for 50 condo units.

“It’s been a very good run,” O’Brien says of his 37-year career as a builder and owner. “And now that the housing market is turning around, it’s a good time to hang it up.”

Learn more about markets featured in this article: Colorado Springs, CO, El Paso, TX.