Division presidents of home building operations that generate less than $50 million annually took down a base salary range of between $165,000 and $238,000 in the past 12 months or so, according to data from Specialty Consultants Inc., an executive search firm with a home building practice. And in the opinion of John McManus, editorial director of BUILDER (as well as ProSales), that division president--especially if he or she is at a privately held company, "is earning every penny in his or her pay package."

Here's the rest of his commentary:

Even as the new-home market sustains traction and momentum on a recovery path in 2018 and beyond, the hard-won benefits of recovery--access to the richest vein of home buyer demand with community and product lines that meet their pocketbooks--seem to slant toward the very big, very deep-pocketed, and very scaled big builders in each market.

Meanwhile, the math for private builders is harsh, and getting tougher.

Big public builders--leveraging finance structures that allow them to move less expensive capital into play for growth--have kicked up their operational concentration and deepened their marketshare by introducing new neighborhoods, and new ones in the local pipeline.

As they secure "favored-nation" status with land sellers, trade crews that operate in the market, and local distribution nodes, the bigger, more scaled builders force private builders into a more defensive corner.

There, profitability is getting squeezed on all fronts. Material cost inflation, a non-factor for years, has added itself to a pile of direct cost pressures on labor, higher premiums--and lower returns--on lots at retail, start-to-completion schedules that get drawn out due to less sway with subcontractor crews, and upward pressure on capital lending costs as interest rates go up on commercial as well as individual loans.

At the same time, private home building enterprises that have thrived through the years as cunning cycle-timers on land, as long-term relationship builders with land sellers--often getting access to off-market parcels, as ones with builder-of-choice status among local contractor firms, and most importantly, as having both better market knowledge and a better reputation for quality among home buyers now see their competitive edge with buyers eroding.

As new technology allows bigger builders with resources to invest in data and customer relationship management tools to engage prospective buyers earlier on in their "customer journey," the advantage private builder sales and marketing teams once enjoyed starts to show signs of vulnerability. New young buyers bring different habits, behaviors, attitudes, preferences, and values to the process, and lean much more heavily on technology in their purchase decisions.

This factor--the constrained resources private home builders draw on to put technology and data into play as they try to court a new generation of young adult buyers--is only now starting to play out. It's a factor that impacts not only access to the buyer pool, but to the whole chain of land investment, product design, workflow, and expected delivery and closing date timing.

It's why profitable new-home development, real estate, and construction are more and more a science, and it's why--after years of very little conventional research and development investment on the part of home builders--we're seeing the ones with the resources exploring new construction and automation technologies, as well as data, logistics, and financial technologies that impact the chain of events, from the dirt to the closing table.

So, the gap between bigger companies and smaller ones becomes more than a function of mass, and more a substantive difference that matters.

All of this adds up to a dial-up in the motivation on the part of private home builders to find big capital partners--either through outright entity transactions or other forms of joint venture--to unlock the ability to achieve better margins in the present, and map a path to viability in the future.