Survivors Get the Spoils

Posted on September 25, 2012 ยท Posted in Competitive Strategy

Justin Lahart in his WSJ article on September 25, 2012 made some detailed observations about the home building industry.  At the end of 2011 there were only 86,736 contracting firms in the single family construction industry.  At the peak of the market in 2006 there were 125,911.  Even as far back as 2011 there were 107,643.

All builders have had great difficulty during the "recent unpleasantness" but the public builders are still standing while many privates are gone.  The large publics have amassed substantially larger shares in that that the remaining privates are particularly constrained by a tough lending climate and its impact on new projects and lot acquisition.

The large publics continue to deepen their land banks for strong positioning as the market picks up.

So far this year, while the market is better it is still about 40% below the pace of the 1980s.