Management Might NVR, Hovnanian Enterprises, Meritage Corp., and The Ryland Group took top ranking honors in an annual list compiled by Forbes magazine for long-term success based on their total return on capital over the past five years. Eleven other home builders also ranked high on Forbes' list of 400 “Best Big Companies” (see chart below). Forbes also recognized a “best-managed” company within each of 26 industries it analyzed, naming D.R. Horton of Arlington, Texas, in the construction industry, based on overall financial performance.
Schottenstein Passes Away Irving E. Schottenstein, co-founder and chairman of M/I Homes, passed away February 11. He was 75. Irving and his cousin, the late Melvin L. Schottenstein, founded M/I Homes in 1976, and the company has since built more than 56,000 homes, primarily in the Ohio region. Irving served as the company's CEO until earlier this year when his son, Robert Schottenstein, the company's president, took over. Since its inception, M/I Homes has—under the watchful eye of Irving—grown into a nationally recognized builder. In the past five years, M/I Homes has seen an increase in revenues from $614 million in 1998 to $1.03 billion in 2003, as reported by Builder magazine.
Schottenstein was considered a pillar in the Central Ohio business community. Throughout his life, he was active in various civic, charitable, and Jewish organizations and was nationally recognized as a visionary in the home building industry.
Record Reports Standard Pacific Homes joined its public builder peers reporting record year-end figures. The Irvine, Calif.-based builder reported fourth quarter net income of $79.7 million, up 52 percent over the year before on an 18-percent gain in revenues, to a record $802 million. Deliveries for the period jumped 13 percent to 2,677, helped in part by recent acquisitions. For the year ending Dec. 31, Standard Pacific's net income increased 72 percent to $204.4 million, while revenues hit a record $2.3 billion, up 25 percent over 2002. Deliveries for the year totaled 8,213 new homes, up 31 percent from last year while its backlog reached a record 4,435.
WCI Rebounds WCI Communities ended its year by reporting triple-digit order growth, a record backlog, and an upswing in earnings. The Bonita Springs, Fla.-based builder stated that its net income for its fourth quarter, which ended Dec. 31, was up 34 percent from the prior year, to $59.6 million; revenues were up 28 percent, reaching $575.2 million. For the year, the builder's 2003 net income was up 1 percent, totaling $105.6 million on a 20 percent increase in revenues (of $1.45 billion) over last year.
Big Returns (Company, 5-year % total return on capital, and ROC rank among Forbes 400 “Best Big Companies.”)
Green Standards Building Green building guidelines that provide a nationally recognized baseline for determining minimum thresholds for resource-efficient, cost-effective home building will be forthcoming before the end of the year, the NAHB announced at the International Builders' Show. Ray Tonjes, a home builder from Austin who is the NAHB Green Building Subcommittee chairman, said that the standards will ensure that all home builders understand green building techniques. The guidelines vary by region, added Tonjes. “The home building community around the country can use [the guidelines] for specific, regionally distinct green home building efforts.”
Peace of Mind An increasing number of homeowners are demanding security systems similar to those in commercial buildings, spending upwards of $10,000 for remote-monitoring functions, fingerprint or eye scanners, digital cameras, and infrared sensors. Experts attribute the interest in security to the terrorist attacks of Sept. 11, combined with developer requirements and lower-cost technology.
Some builders are forging partnerships with security firms, reports the Baltimore Sun, so that homeowners can save money by having the wiring installed during the construction process. The popularity of security systems, however, has driven up the number of false alarms. In response, many municipalities force homeowners to register their systems for a fee and impose fines after three false alarms in a single year.
Texas-style Help National Builder Services of Texas has launched a new home buyer program that helps home builders manage contingency buyers—people who can buy a new home only after selling their current home. The service, called The Move-Up Program, helps homeowners sell their current home and secure an on-time closing for a newly constructed home. The program involves a financing system that relieves the homeowner of multiple real estate commissions.