Strengthening its position in the Southeast, KB Home has acquired one of the area's largest privately owned home builders: Colony Homes. In 2001, KB acquired Jacksonville-Fla.-based Trademark Home Builders. In 2002, KB launched operations in Tampa and acquired Orlando-based American Heritage Homes.
Strategically, the acquisition of Colony Homes provides KB with control over approximately 8,200 lots across the three markets Colony operates in: Atlanta (1,052 homes delivered in 2002); Raleigh (544 homes delivered in 2002); and Charlotte (276 homes delivered in 2002). Colony generated revenue of more than $244 million in 2002 and ended the year as the second-largest single family home builder in Atlanta at a price point of less than $225,000.
"This acquisition positions KB Home as a true market leader from coast to coast," said Bruce Karatz, chairman and CEO of KB Home. "With the acquisition of Colony, along with our recent moves in Florida, we will have grown from having no position in the region to becoming a formidable player in the five biggest new home markets in the Southeast." Atlanta, Tampa, Charlotte, Orlando, and Raleigh were the largest new home permit markets in the Southeast in 2002, with Atlanta topping the nationwide list.
In the next three years, a union mortgage initiative -- currently operating in more than 20 U.S. cities -- is expected to generate 10,000 loans with a total volume of $1.2 billion nationwide. AFL-CIO Housing Investment Trust (HIT), Countrywide Home Loans, and Fannie Mae have joined forces to help make the initiative -- dubbed HIT HOME -- available to more than 13 million of the nation's union members. While boosting homeownership, HIT HOME is also intended to make the process of buying a home more affordable and worker friendly.
"Our goal is to help America's working families reap the benefits of homeownership," said AFL-CIO president John Sweeney. "Firefighters, teachers, health care providers, and construction workers are tremendous resources to our communities."
Industry Movers and Shakers
Richmond American Homes has announced that Mark Butler has joined the company as president of the San Ramon, Calif., division. Butler comes to the company from D.R. Horton, where he served as vice president of the California region. Butler brings nearly 15 years of experience in the home building industry.
Choice Homes has tapped Dan Jenkins as the southeast regional marketing manager. In the newly created position, Jenkins will focus on the greater Atlanta and Macon, Ga., areas.
After 23 years of service, Sanford Sigoloff is retiring from KB Home's board of directors this month. Sigoloff will officially step down at this month's annual shareholder meeting. In accordance with the company's corporate governance rules, two other board members will not stand for re-election. Guy Nafilyan is stepping down after 15 years of service. Henry Cisneros, who joined the KB Home board in 2000, will also step down.
Pulte Homes has promoted Leo J. Taylor to senior vice president of human resources. Taylor, who joined Pulte Homes in 1994, will now report directly to Mark O'Brien, Pulte's president and CEO.
Del Webb Dance
Pulte Homes' Del Webb brand is trying something new: An active adult country club. Located northwest of Phoenix, Ariz., the Corte Bella community was designed with those age 55 and older in mind. According to the 2000 U.S. Census Report, 21 percent (59 million people) are older than 55 and another 13.4 percent (38 million people) are between the ages of 45 and 55 -- and are quickly adding to the active adult demographic.
The project, the first of its kind for Del Webb, brings together two of the brand's most successful offerings -- active adult communities and upscale country clubs. Homes in the 720-acre community will be priced from $130,000 to $300,000.
To better meet the demands of a market of more than 35.3 million people with buying power of $454.2 billion, Pulte Homes has launched a Spanish language Web site (www.espanol.pulte.com). The Hispanic market, according to online audience measurer Nielsen/NetRatings, is the fastest growing online ethnic group in the United States, projected to hit almost $1 trillion in buying power by the year 2007.
"Immigration, especially the Hispanic market, plays an important role in housing, and the economy," said Jim Lesinski, vice president of sales and marketing for Pulte. "By reaching out to Hispanic customers in their native language, we can attract new home buyers, and also increase brand loyalty and referrals to their families and friends among our existing Hispanic homeowners," added Lesinski.
It's about accountability and protection. And the U.S. Department of Housing and Urban Development wants to hold lenders accountable while protecting home buyers from predatory lending practices. HUD has proposed a lending accountability rule that would make lenders responsible for the appraisals on mortgages insured by the Federal Housing Administration (FHA). The proposal is intended to stem losses in the department's FHA insurance fund, which pays off lenders when borrowers default. Rule "FR-4722 Lender Accountability for Appraisals" would make lenders accountable for the quality of the appraisals. Lenders that submit appraisals to HUD that do not meet FHA requirements will be subject to sanctions by HUD's Mortgagee Review Board.
A non-profit consumer advocacy organization is kicking up the dust in Texas after its release of a negative study on the use of mandatory binding arbitration in new home contracts. Much of the study, conducted by Homeowners Against Deficient Dwellings (HADD), is based upon testimony from two studies done by the Texas House of Representatives in the summer of 2002. HADD wants to alert home buyers to the dangers of signing contracts with generic arbitration clauses -- clauses they say strip the buyer of his rights. In general, arbitration awards to homeowners are less than awards given for punitive damages.
Learn more about markets featured in this article: Atlanta, GA.