What a year it has been for Home Building! With the market really starting to bounce back, we have been very busy this, Joseph Chris Partners’ 40th year in business.
It has been the year of mergers and acquisitions. We saw Lennar, America’s #2 ranked home builder, put up $5.7MM to acquire CalAtlantic, the nation’s fifth largest home builder; which very recently was the product of a Standard Pacific Homes and Ryland Homes merger itself. Lennar is now the largest home builder by revenue and is in 24 of the top 30 housing markets across the U.S.
We saw Century Communities grow by leaps and bounds with multiple acquisitions across the country including UPC and Sundquist Homes, and they also went through an IPO.
We also saw Starwood Capital compete with DR Horton to acquire Forestar, a mixed-use, residential builder based in Austin, Texas. Ultimately, DR Horton won the game.
And just last month, we saw Invitation Homes merge with Starwood Waypoint; the combined public company will continue operations under the Invitation Homes name. And, Mattamy Homes announced their acquisition of Royal Oaks Building Group in the Raleigh-Durham, North Carolina, market. Royal Oaks is the largest privately-owned builder in the Raleigh-Durham area and the fifth-largest builder overall in the market; the operations are expected to be completely combined by Mid-2018.
But 2017 was not without its challenges in home building; specifically, builders everywhere struggled with labor shortages. According to The Brookings Institution:
“More than 32 million workers are employed in highly digital jobs, while nearly 66 million work in medium- digital positions, and 41 million work in low-digital ones. Indeed, there has been a massive increase in the share of highly digital jobs between 2002 and 2016, when these jobs jumped from less than five percent to nearly a quarter of all U.S. jobs. Over the same period, the share of medium-digital jobs increased from roughly 40 to 48 percent, while the share of low-digital roles declined significantly, from 56 percent to 30 percent. Roughly two-thirds of new jobs created since 2010 required either high- or medium-level digital skills, and some 4 million, or 30 percent, required highly digital skills.”
Builder Online.Com stated: “Anyone still wondering why young people are not breaking down the doors to sign up to be construction laborers, who rank among the “low-digital” competence occupations?”
We at Joseph Chris have seen this struggle with our clients across the country daily throughout the past several years. Not enough people entered the industry during the long, drawn-out downturn, and home builders are having to get creative to find the talent they need.
All in all, though, 2017 has been a great year! Joseph Chris Partners celebrated its 40th Birthday and the year kept us all very busy. So far, things are looking even better for 2018!