Chart: Analyzing the Top 100 Builders in America
Originally published by: Builder Online — May 5, 2016
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There's a day every year that the Builder 100--a survey-driven rankings of home building's largest companies by volume during the prior calendar year--comes to light. Today is that day.
If your organization is on the list, it's because someone--often several people--took the time to answer our questions about business and financial performance and important issues.
This year's Builder 100 ranked organizations--from Texas-based D.R. Horton in the No. 1 position to Texas-based Tilson in the 100th spot--accounted for 240,190 homes closed between Jan. 1 and Dec. 31, with 2015 total revenue of $70.4 billion. Blend those numbers with our Next 100 crop, and the 200 builders, altogether built and closed 261,372 homes, with a total revenue of $99.3 billion. Click here for a printable list of the Builder 100 and Next 100 in PDF format.
Here is how the top-200 builders fared in the overall home building market, as depicted in this graphic from BUILDER sister company MetroStudy based on its new national database of home closings.
Source: Metrostudy / Note: The Builder 100 total of closings exceeds the MetroStudy total by 2,273 closings. The discrepancy is due to the difference between public-data and self-reported closings by builders. The discrepancy is not statistically significant
Year on year, growth was impressive. The group produced a 6% gain in homes closed, and 15% revenue growth from 2014's results to 2015's.
We'll look at a couple of salient trends and talking points for the year. But first a word on what the Builder 100 means.
It's no mere list. The rankings, scorecards, tallies, and totals mean what they do because people work as teams to excel, produce value, deal with impediments, make a difference.
Together, Builder 100/Next 100 companies' aggregated productivity created 1,029,805 local jobs in those builders' local markets. That's separate from the career development opportunity for building companies' associates, sales and operations forces, and executive teams.
Together, Builder 100/Next 100 companies' aggregated productivity generated more than $75 billion in local income among municipalities and submarkets around the nation.
Together, Builder 100/Next 100 companies' aggregated productivity generated $21 billion in local, county, state, and federal taxes, fees, and other regulatory expenses in the process of delivering those 261,372 homes to owners.
Most importantly, Builder 100/Next 100 companies' aggregated productivity caused two very important changes among customer buyers as they came to market. That total means that in each and every case, barriers to that buyer saying "yes" were lowered, while, equally, in each and every case, the customer's own sense of him, her, or themselves elevated to a level where they saw themselves realistically as buyers.
What does the Builder 100 mean to you?
Here are some other data points, assembled by my colleague Charlotte O'Malley, who runs our Hanley Wood Data Studio.
- The 23 public builders in this year’s B100 accounted for a 64.40% share of the total closings reported by all builders in the Top 100/Next 100. (168,326 of the 261,372 total closings)
- In 2015, total gross revenue of the Top 100/Next 100 builders amounted to $99,303 billion. Public builders grossed $65,026 billion in 2015, accounting for 65.48% of the total gross revenue.
- 40.31%, or 79 of the 196 top builders that disclosed the range of their gross margin in 2015 compared to 2014, reported an “increase” year-over-year. 70 builders, or 35.71%, reported that their gross margin stayed the “same” year-over-year, and 47 builders, or 23.98%, reported that their gross margin decreased.
- Among the 196 builders that disclosed the range of their gross margin in 2015, 67 builders, or 34.18%, reported a range of “21-25%,” accounting for the largest share of responses. The second largest share of builders (28.06%, or 55 builders) reported a “16-20%” range of gross margin, followed by a range of “26-30%” (14.79% or 29 builders), 10-15% (13.26% or 26 builders), “Less than 10%” (4.08% or 8 builders), “31-35%” (3.06%, or 6 builders), and “40% or more” (1.53%, or 3 builders).
- In 2015, the top 200 builders controlled a total of 1,028,900 owned lots, and 498,295 optioned lots, marking a 1.37% and 7.63% increase year-over-year, respectively.
- Home building remains a close-knit, small operation for the majority of builders in our Top 100/Next 100 list. Among all builders in the Top 100/Next 100, the average number of employees is 375, despite outlying companies with thousands of employees, and others with single-digits. Among the Top 100 builders only, the average number of employees is 668, brought up primarily due to the large-scale operations of public home builders. Among the Next 100 Builders, the average number of employees is 78, representative of many small, family owned-and-operated builders like X included in the bottom half of the Builder 100.
- Builders in the Top 200 of our list are still focusing primarily on move-up buyers, following the trend seen since 2009, when the impact of the downturn was coming fully into view. In 2015, 53.50%, or 107 builders, reported that 50% or more of their total units closed in 2015 were move-up product. Over the past five years, the affordable product segment has declined -72.73%, from 11 builders reporting 50% or more of total closings in 2010, to 3 builders in 2015. During that same period, the move-up product segment grew by 42.67% as builders relied on buyers with better financial means to make sales at a good margin.