2008 was, to say the least, a tumultuous year for the nation’s top 10 builders. 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.
Many of these companies operate on fiscal year budgets that end in months other than December, making side-by-side sales comparisons difficult. So each year, Builder magazine, as part of its Builder 100 survey, asks the nation’s biggest builders to total their calendar year closings.
Every one of the top 10 companies recorded a sales decline, though some fell more than others. One builder, Meritage, made its first appearance on the top 10 list, despite a 51 percent decline in closings. Another, Pulte, jumped two positions; its closings fell only 24 percent. Read on and find out who the top 10 builders were in 2008.