National list ranks Sarasota region’s top homebuilders

Original Story: businessobserverfl.com

SARASOTA — The top 10 home builders in the North Port-Sarasota-Bradenton region made up more than 93% of the area’s total market share in 2015, according to Builder Magazine. Find a custom home builder Tampa to build your dream home.

Builder Magazine released its list of the top 10 local home builders in Sarasota-Manatee. The 10 companies closed 3,570 homes in 2015, according to the list.

Lakewood Ranch-based Neal Communities of Southwest Florida topped the list with 747 closings. Here is the full top 10 list of companies and the number of homes they closed in 2015:

1.    Neal Communities of Southwest Florida: 747 closings
2.    Lennar Corp.: 606 closings
3.    D.R. Horton: 529 closings
4.    PulteGroup: 529 closings
5.    Taylor Morrison: 387 closings
6.    WCI Communities: 317 closings
7.    CalAtlantic Group: 183 closings
8.    Medallion Home: 126 closings
9.    Minto Builders: 74 closings
10.    Ashton Woods Homes: 72 closings

Homebuilding looking up

originally appeared in Zacks Equity Research:

KB Home, one of the leading homebuilding companies in the U.S., recently acquired lands for 100 luxury homes in the sought after community of Playa Vista in Westside, Los Angeles. The construction of homes will start in spring.

The company intends to build three story detached homes of 2,800 square feet. The homes will have four bedrooms and three and half baths. The company also intends to build single floor condominium homes of 2,000 square feet with private elevator access for each home.

For simple or more complex bathroom remolding projects, consider an outstanding bathroom remodel grand rapids company that does quick, professional work.

Owing to its operational business model KBnxt, KB Home always begins construction only after a purchase agreement is executed. As such, the consumers buying KB homes in Playa Vista will get the liberty to plan their homes according to their preference.

This process also helps the company turn over its inventory more quickly than its peers, thereby supplying capital for reinvestment. In the long run, this reduces the risk of unsold inventory leading to higher returns on invested capital.

Playa Vista is one of the most sought after luxurious communities in Westside, Los Angeles. The acquisition of land in Los Angeles’ Westside is in line with KB Home’s strategic shift in its geographic footprint. The focus is to place the communities in highly desirable land-constrained submarkets that enable it to sell larger, higher-priced homes, thus driving a strong increase in average selling price.

The rising demand for new homes has led to a favorable situation in the housing market, where inventory levels are dropping and prices are moving up. The demand has been particularly strong for luxury homes. Toll Brothers, Inc., another leading luxury homebuilder in the US, has been witnessing strong overall growth over the past few quarters.

Therefore, building adequate number of new homes is necessary in order to maintain the required level of inventory to meet the growing demand for homes. Acquiring lots and lands in the Playa Vista community will help the company to capitalize on the increasing housing demand.

With housing market recovery gaining momentum, KB Home believes its strategic initiatives including overhead reduction, margin expansion, and land investments in higher-priced, better-located communities; and increasing backlog will help it achieve profitability in the upcoming quarters. Though we have faith in KB Home’s strategic initiatives, we believe that it may take time to achieve sustainable profitability as the housing market recovery process is erratic and uneven.

We currently have a Neutral recommendation on KB Home. The stock carries a Zacks #3 Rank (a short-term Hold rating).

Protect Yourself From Shady Contractors
Story from the Baltimore Sun

You find the new home of your dreams. But what happens when the home builder does not deliver as promised?

The Maryland Attorney General's Office announced Friday that it has charged Columbia-based home builder Altieri Homes with taking deposits and payments from at least 20 homebuyers in Howard and Harford counties but failing to either start or finish the homes. The attorney general's Consumer Protection Division also accuses Altieri of not refunding consumers' deposits or advance payments and failing to pay subcontractors.

As if buying a home is not stressful enough, what are your rights and recourse if you're faced with a similar situation? How do you protect your hard-saved deposit?

Marylanders buy more than 10,000 new homes each year, according to the attorney general's office, and a new home purchase is protected by state law.

Here are other questions to consider:

How do I find a reputable builder?

For starters, make sure your builder is registered. All home builders operating in Maryland must register with the attorney general's Home Builder Registration Unit, except for firms that build exclusively in Montgomery County. (Home builders there must register with the Montgomery County Office of Consumer Protection.)

"It's so important for consumers to check with our office to see if the builder is registered and if they have any complaints, especially on an investment this large," said Raquel Guillory, a spokeswoman for the Attorney General's Office. "Probably for some people this is their life savings, their dream home."

Call (410) 576-6573 in the Baltimore area or (877) 259-4525 in other parts of the state to find out whether your builder is registered with the Home Builder Registration Unit. Or visit www.oag.state.md.us/homebuilder.

A builder's registration can be suspended, revoked or denied for several reasons, including engaging in a pattern of poor workmanship. Another avenue to investigate your home builder is to check lawsuits at the Maryland Judiciary Case Search at http://casesearch.courts.state.md.us/inquiry/inquiry-index.jsp.

A word of caution: The sheer number of lawsuits alone may not be a good indication of a home builder's reputation and quality of work.
How do I protect my deposit?

State law requires the home builder to place your deposit in an escrow account, unless the builder has corporate surety bonds or an irrevocable letter of credit on file with the state.

The builder must disclose whether your deposit is protected by an escrow account, bond or letter of credit.

The attorney general alleges Altieri failed to put customer deposits in an escrow account or secure them through a bond or letter of credit. Verify the builder's escrow account by calling the bank. To verify the builder's bond or letter of credit, call the Home Builder Registration Unit.

What if I encounter problems?

Contact the builder first. Put your problems in writing to the builder. Keep copies of all correspondence and maintain a log of your contact with the builder.

The attorney's general says the best chance of resolving problems is to catch them early and to try to work them out with the builder.
What if a dispute with a builder goes nowhere?

There are several options.

If the builder has provided home warranty coverage, you may be able to file a claim under that plan.

You could also file a complaint with the attorney general's office. The Mediation Unit will attempt to resolve the dispute. But if that fails, the dispute can be submitted to the Arbitration Unit, if both parties agree to it.

For contracts with registered home builders agreed upon after Jan. 1, consumers can file a claim with the Home Builder Guaranty Fund. The fund provides compensation of up to $50,000 for "actual loss" due to incomplete construction, breach of warranty, failure to meet standards or guidelines, or failure to return a deposit.

Before filing a claim with the fund, the attorney general's office says you must file a complaint with the Mediation Unit and have already provided the builder with an opportunity to address your problems.
Should I consider a legal claim against the builder?

"They have the right to sue a general contractor for workmanship that isn't up to standards or somebody who has caused them damage because they didn't do work," said John Prisbe, a partner with Venable's Baltimore office who has represented buyers and builders. (Prisbe has not done any work with Altieri.)

Before taking the legal route, check your contract, which can call for binding arbitration or other forms of alternative resolution as well as prohibit a buyer from suing the builder.

"That could dictate where you're going to bring your claim," Prisbe said.

Another issue to consider: Weighing legal costs against your chances of recovering damages.

"A concern is when you have a builder who's in financial difficulty and whether you have the ability to recover," Prisbe said.

Remember that the plaintiff has the burden of proof. The case's resolution can depend on the complexity of the dispute and how much is at stake, Prisbe said.

For claims $30,000 or less, you can file in District Court or also choose to file in Circuit Court, Prisbe said. For claims over $25,000, you must generally file in Circuit Court.

Home Builders Competing Against Foreclosure Prices
As Originally Posted at The Wall Street Journal

As the normally hot spring selling season begins, two houses in the Inland Empire region of Southern California sum up the big problem facing many of the nation's largest home builders.

One of the houses, a four bedroom built in 2006 that was seized by a lender in a foreclosure action, is listed for sale at $229,900. Meanwhile, in the same housing development, D.R. Horton Inc. is trying to sell a new house that looks nearly identical for $299,000, or 23% more.

Or consider Pulte Homes Inc.'s predicament in Henderson, Nev., near Las Vegas. The builder is trying to sell a new, four-bedroom house for $214,990, while a home owner is trying to dump a similar house, which Pulte built two years ago, for $149,999. That price is less than the owner's mortgage under a "short sale" approved by the lender.

In many markets, "we are no longer competing with other builders. We are competing with foreclosures," said Steve Ruffner, president of the Southern California division of KB Home.

Sales of used homes are actually rising in some regions because of foreclosures, but new-home sales fell to a four-decade low in January, down 77% from their peak in summer 2005. Altogether, home builders sold houses at a seasonally adjusted annual rate of 309,000 units in January, down from a peak of 1.4 million in July 2005.

Home builders are confronting the competition from foreclosures at a difficult time in their history. Small builders are dying by the dozens, while some large companies are staying afloat by cutting expenses and scrambling to restructure debt.

President Barack Obama's foreclosure-prevention plan is likely to help stem the supply of bank-owned houses somewhat, and the administration's proposed budget would extend builders a lifeline through a lucrative tax break. But the foreclosure problem won't disappear.

"I don't know how the builders are going to compete," said Credit Suisse analyst Daniel Oppenheim, who downgraded his ratings for Centex Corp. and D.R. Horton stock last week, partly out of concern about foreclosure competition.

The problem is particularly vexing because many buyers are bypassing new houses for foreclosed ones that are virtually new and are often located in the companies' own developments. "Buyers think they are going to get the best bargain with a foreclosed house, and they aren't even looking at new homes," said Graham Holmes, owner of Reviron Realty, which sells bank-owned properties in the Inland Empire.

Home builders' responses to the foreclosure threat vary. Los Angeles-based KB Home is focusing on building smaller, lower-priced houses that can compete with foreclosures head on. The builder has shrunk its house size from an average of 3,200 square feet during the housing boom to an average of 1,600 square feet in many markets today. "We're finding that if we can get a product to market that is priced competitively with foreclosures, [we] can sell pretty well, even in these times," said Jeffrey Mezger, KB's chief executive.

Dallas-based Centex, on the other hand, says it's not trying to beat lenders on price. Instead, the nation's third largest builder by volume is trying to entice buyers with perks like mortgage interest rates as low as 4.25%, energy-efficient designs and warranties.

D.R. Horton also offers incentives, including covering the buyer's closing costs, and touts a $10,000 California tax credit for buying a new house. And it notes that buyers often need to spend money to fix up foreclosed properties before they can move in.

Builders also argue that while they may look alike, new and foreclosed houses aren't comparable. "Our brand-new homes appeal to the buyer who wants up-to-date features, a chance to make their own selections like carpeting and paint colors," a Pulte spokesman said.

Some buyers clearly agree. "A foreclosure is like a used car," said Danny Hernandez, who bought a new, $237,000, five-bedroom KB house in Beaumont, Calif., in the hard-hit Inland Empire. Mr. Hernandez, a 41-year-old warehouse worker, said the fact KB paid his closing costs and a nonprofit group subsidized his down payment helped make the sale.

Another strategy: build in new neighborhoods that aren't filled with vacant, bank-owned houses. "In general, we try not to compete with foreclosures," said Centex Chief Executive Tim Eller. "It's not all about price, it's about value. Buyers determine value by the look and feel of the neighborhood."

KB said its smaller houses are selling well, but the prices keep sinking. In November, KB was selling its line of smaller houses at a development in Beaumont for as little as $207,990. Now, it has dropped its starting price to $169,990 to match recent foreclosure values in Beaumont. Since it opened the Highland Vista development last summer, KB has sold 28 homes out of about 110 house lots.

Analysts question how low builders can go before building a house costs more than they can charge for it. In some markets in California and Florida, builders have reached that point and have stopped building.

Home Builders Toll Brothers, MDC, Have a Built-In Funding Cushion

AS posted by: Wall Street Journal

U.S. home builders helped lay the groundwork for the financial crisis by building too many homes. Some also created blueprints now helping them survive it -- by locking in long-term debt.

A handful of home-building stocks are among the market's top performers this year. That is partly because their shares were hammered in 2007. But the companies also got a head start in switching to a conservative operational and financial footing before crisis reached the broader economy and financing became punitively expensive.

Now, cash-padded homebuilders such as Toll Brothers and MDC Holdings have some space to wait for property markets to improve. Meantime, they aren't likely to be forced to sell off land banks at rock-bottom prices. A great way to increase the alue of your home is to invest in Lawn Care and Landscaping.

Toll Brothers, a builder of luxury houses, has $1.6 billion in cash and $2.1 billion of debt and it shares are up 8% this year. MDC has $1.2 billion of cash and $1 billion of debt.

MDC's shares are down 16% for the year, but that's a fraction of the 39% decline in the S&P MidCap 400 index.

The two companies tapped long-term bond markets when conditions were still favorable. Toll Brothers has sufficient cash holdings to retire obligations through 2014.

The companies also issued bonds under "covenant-lite" terms that impose few restrictions.

Toll and MDC both generate positive cash flow, while posting heavy losses because of non-cash write-downs. And the two could even gain from the weakness of others.

Private companies accounted for about one quarter U.S. home building at its recent peak, but many are expected to fail. Unlike most listed home builders, private players are often dependent on bank loans, and many lenders have stopped backing residential projects. Toll brothers may book real estate services through a Durham Real Estate Agency, Cary Real Estate Agency or Chapel Hill Real Estate Agency.

Cash reserves could even equip Toll and MDC to scoop up distressed assets that appear when competitors liquidate. Toll showed bargain hunting prowess after the savings and loan crisis, when it bought property from the Resolution Trust Corp. at deep discounts. Even if other home builders remain solvent, they will have less cash to spend on discounted property.

The market puts a premium on strong balance sheets. Toll Brothers trades at 1.13-times book value and MDC trades at 1.29 times book value while many competitors are valued below par.

Weaker companies are highly leveraged bets on a property turnaround they may not survive to see. Investors who believe that housing is near the bottom need not bet on the weakest. They will have plenty of excitement from the likes of Toll and MDC if they are right, as well as a little breathing space if the recovery takes longer than they expect.