Next 100 builders did not fare as well in the soft housing market as their larger brethren in the BUILDER 100. The average Next 100 builder closed 448 homes in 2006, a decrease of 9.5% from 495 homes in 2005. The Next 100, which closed a combined 44,824 homes, had a 3.9% share of the total housing market in 2006. With 97 companies reporting their revenue, the average Next 100 company grossed $168.6 million, $23.4 million less than in 2005, but $18.6 million more than 2004.
UP, UP, AND AWAY: In 2005 the top 10 high risers on the Next 100 gained an average of 32.3 positions. This year the top 10 fasters movers only rose an average of 25 spots, a sign of the Next 100 builders' exposure to a weak home building market.
CLIMBING: Only list leader Magellan Development Group topped 60% unit-growth among 2006's Next 100 companies. Magellan also had 72% unit-growth in 2005. That year four companies had better than 60% growth, while the 10th spot on the unit-growth list had 37% growth.
NEW LINEUP: Five of last year's entry-level closings leaders graduated to the Builder 100, leaving a wide-open playing field. Only R&B Construction, Premier Design Homes, and Meridian Homes USA made the list as repeats. Eight of this year's entry-level leaders building in the South, six exclusively, while three build in the Southwest, two exclusively.
HIGH-CLASS SPECIALISTS: While most of these companies build other products, David Cutler Group and David Powers Homes build solely high-end homes. The other four companies rounding out the top six, build at least 60% luxury/custom homes.
SUNNY DAYS: Closings declined for the three returning Next 100 builders on this list, Seagate Homes, Ence Homes, and Lane Co., but Seagate and Lane were able to gain revenue in a tough market. Not surprisingly, three of these vacation specialists hail from Florida.
CRYSTAL BALL: We asked all Builder 100 survey respondents to rank the importance of these 10 factors in improving the competitive positions of the Builder 100 over the next 10 years, and it seems the Next 100 is focused on building and selling to new residents. Not surprisingly, smaller builders also are more focused on gaining efficiencies in purchasing. The Builder 100 ranks purchasing efficiencies sixth, as many have already worked to take advantage of their size with suppliers.
MODEST GROWTH: Only half of the closings leaders made the revenue list, highlighting the incentives offered to buyers in 2006 to spur flagging sales. Price reductions and incentive cut away at builders' margins. All 10 of 2005's revenue-growth leaders topped 54% growth.