Lennar Enters San Antonio Lennar Corp. announced that it has expanded into San Antonio, Texas, through the acquisition of substantially all of the real estate assets of Connell-Barron Homes for an undisclosed purchase price paid in cash. Connell-Barron Homes delivered approximately 130 homes in 2003 at an average sales price of $244,000. As part of the purchase, made in mid-March, Lennar will acquire a backlog of approximately 81 homes and approximately 1,200 home sites.

Leading Twin City Builders Hovnanian and Toll Brothers will face plenty of competition as they enter the Minneapolis-St. Paul market. But the prospects are hard to ignore. The Twin Cities, with a population of more than 3 million and projected job growth of 1 percent this year, are expected to see 17,300 single family and 6,400 multifamily homes permitted in 2004, according to the Meyers Group.

Rank Builder Total Permits 2003 Closings Market Share
1 Centex Homes 1,036 5.1%
2 Rottlund Homes 985 4.8%
3 Lennar Corp./ Lundgren Bros./Orrin Thompson 788 3.9%
4 D.R. Horton 689 3.4%
5 Ryland Homes 592 2.9%
6 Pulte Homes 585 2.9%
7 M.W. Johnson Construction 530 2.6%
8 Wensmann Homes 452 2.2%
9 Town & Country Homes 440 2.2%
10 Bielinski Homes 385 1.9%
Minneapolis-St. Paul Total Permits: 20,327
SOURCE: MEYERS GROUP; BUILDER MAGAZINE

Productive Managers While public builders delivered impressive financial gains in fiscal 2003 to investors (see Public Builder Report Card, page 32), much of the credit belongs to hard-working division and mid-level managers. Among the most productive public home building teams this past year:

2003 REVENUE PER EMPLOYEE ($ 000s)

1
Brookfield Homes
$1,881
2
Meritage Corp.
$1,544
3
D.R. Horton
$1,447
4
Hovnanian Enterprises
$1,413
5
Standard Pacific Corp.
$1,388
6
William Lyon Homes
$1,360
7
The Ryland Group
$1,346
8
KB Home
$1,198
9
Beazer Homes USA
$1,101
10
M/I Homes
$1,094

2003 NET INCOME PER EMPLOYEE ($ 000s)

1
Brookfield Homes
$
162
2
Standard Pacific Corp.
$
120
3
Hovnanian Enterprises
$
114
4
D.R. Horton
$
110
5
William Lyon Homes
$
109
6
NVR
$
109
7
Meritage Corp.
$
99
8
The Ryland Group
$
95
9
M/I Homes
$
84
10
Toll Brothers
$
77
Note: Figures based on 12-month results through fiscal quarter ending on or closest to Dec. 31, 2003.
SOURCE: BIG BUILDER MAGAZINE; COMPANY DATA; REUTERS.COM

BIG BUILDER CORRECTION: In the mid-March issue of Big Builder magazine, we mistakenly identified David Weekley Homes as the largest builder in Texas. D.R. Horton is the largest publicly held builder in Texas. David Weekley is among the largest privately held builders in Texas.

RESPA Reform Shelved? It seemed like a no-brainer: Reform the mortgage process and shave $1,000 off closing costs by permitting settlement packages with fixed prices. But opposition from mortgage brokers, lenders, appraisers, real estate agents, and even some consumer advocates prompted HUD to withdraw its proposed plan in March.

Mortgage brokers did not want to disclose the “yield-spread premium,” which is the amount tacked on to the interest rate. Appraisers were afraid the competition would push smaller players out of the business; and lenders and real estate agents wanted different reforms aimed at allowing them to expand into the other's territory. Even some consumer advocates fought against a simplified mortgage process, because the mountain of documents produces a paper trail useful in class-action lawsuits. But outcry from some members of Congress, consumer advocates, and builders—and intense media scrutiny—is likely to mean that reform can be revived next year.

Choice Chooses Savannah Arlington, Texas-based Choice Homes is expanding into the Savannah, Ga., market with a master planned community of 550 new homes in its first phase. Choice plans to build an additional 1,500 homes in subsequent phases. Choice will build nearly 1,300 new homes in the greater Atlanta area by late fall, while moving forward with plans for developments in South and in Athens, Ga.

Cream of the Crop Three big builders placed among the Top 50 Best-Performing Companies in Business Week magazine's April edition, which ranked the 2004 performances of the companies in the Standard & Poor's 500 through a 10-part formula for financial success. Pulte ranked No. 11 and is the top-ranked builder on the list. (Last year Pulte was No. 19.) Centex was just behind at No. 12, and KB Home jumped into the top 50 for the first time, finishing at No. 48.

Playground Lots A city in southern California is exploring building homes on parts of school properties. Nick Inzunza, mayor of National City, is facing growing enrollment and a limited housing base and wants to reconfigure sites at more than a dozen elementary and high schools throughout the city to recast underused land at schools. Inzunza said the property taxes generated by new housing could fund a significant portion of future school construction and perhaps increase open space as well.

Mission Impossible An affordable housing advocate gave up on finding an affordable Ventura County house despite his $80,000 annual salary. Lyle Wray was priced out of the market, resigned his new job, and accepted a similar post in Connecticut.

The median price for an existing California home in January 2004 was $405,720, according to a study by the California Association of Realtors. That's 21 percent higher than January 2003 and 68 percent higher than in 2000.

The affordability report, comparing year-to-year changes and based on January data, shows that for the second month in a row, only 23 percent of Californians can afford the median-priced home. That's a drop of 6 percent since January 2003.