I sit on the Board for the Builders Association of Greater Boston (BAGB), and have been a member of the Association for a number of years. It’s interesting to learn from my fellow associates about the local home building industry, and also to hob knob with the local builders. But as a member of BAGB, I am also automatically a member of the National Association of Home Builders, and I receive the monthly glossy magazine that they publish, appropriately titled “Builder”. Aside from technical articles about HERS ratings and advances in plumbing, the magazine gives me a broader view of the health of the industry nationwide. Here are some facts, figures and updates from the June edition of “Builder”.
- In 2005, there were more than 73,000 active building companies in the U.S. In 2011 there were fewer than 34,000, a decline of over 50%. The average number of closings per year declined from 18 per builder in 2005 to 9 per builder in 2011.
- Not surprisingly, the large production home builders such as Lennar, Hovanian, Toll Brothers and D.R. Horton take up the lion’s share of the largest markets. These builders are not quite as active in New England as in southern and western markets. For instance, the top 5 builders in the Houston market had 33% of the closings in 2011, and the top 5 builders in the Washington DC area market had 41.8% of the closings, while the top 5 builders in the Boston area market had only 25% of the closings. Our market is dominated by smaller, local builders.
- Despite the health of our local economy, eastern MA and southern NH (considered as one housing market), ranks 49 of 50 in a recent ranking of most active home building markets compiled by Hanley Wood Market Intelligence (#50 is Colorado Springs if you were wondering). Our market had 1,436 closings in 2011. The number 1 through 5 markets were:
- Houston/Sugar Land/Baytown, TX (17,158 closings)
- Dallas/Fort Worth/Arlington, TX (12,840 closings)
- New York/Northern New Jersey/Long Island (10,391 closings)
- Washington D.C./Arlington/Alexandria/MD/W.Va (9,270 closings)
- Phoenix/Mesa/Scottsdale, AZ (7,710 closings)
- The very factor that keeps the large companies out of New England; the scarcity of large tracts of developable land and the onerous nature of our permitting environment, is the thing that has led to retention of housing values in our neighborhoods (my comment).
- According to NAHB Chief Economist David Crowe, home remodeling has shown a bigger bounce back than new home construction. Owners are motivated to improve their properties for their own use (as opposed to preparing for a sale), with kitchens and baths as the most popular upgrades. Whole house renovations and large additions however, are still elusive. This may be good news for residential landscape architects, for as soon as homeowners get through their backlog of interior renovations, outdoor living environments will surely get upgraded as well. Anecdotally, I am seeing more inquiries for small scale landscape renovations.
The NAHB website has a link to a blog that is a great source of information for those who want to get into the weeds of the national housing market.