Size matters, at least if you’re a builder, according to data from Builder magazine’s 2012 Local Leaders survey. The Top 10 builders gobbled up more than half of all home closing in nearly two-thirds of 50 U.S. metropolitan statistical areas in the 2012 ranking.
From Miami to Cincinnati and El Paso to Pittsburgh, big-name builders such as D.R. Horton, Pulte-Del Webb-Centex and NVR dominated their markets, collectively taking 80% or more in market share.
Scale brings advantages to most industries, but the localized nature of housing historically limited the impact of bigness on home building. After years of structural change in the industry and even greater market changes, big builders gained competitive advantages over smaller firms creating a more concentrated landscape.
For instance, in Columbia, S.C., Cincinnati, and Fort Myers, Fla., the big guys squeezed out the competition with a 99.1%, 89.9% and 89.9% share of the market, respectively. The Top 10 claimed more than half the market in places like Salt Lake City (54.6%), San Francisco (51.8%), and Dallas/Fort Worth (51.7%).
Across all 51 MSAs in the survey, big builders covered 63% of the market, an increase over their share just five years earlier of only 38%. In Columbia, S.C., the large company presence increased from 34.2% in 2007 to 99.1% in 2012.
Market share was based on the percentage of new homes sold per builder compared to all new home sales in a particular MSA.