Texas (Can't) Hold 'Em

This article first appeared in the PB May 2007 issue of Pro Builder.

Texas-only home builders in this year’s Giant 400 achieved an average year-over-year growth rate in housing revenues more than six times that of non-Texas Giants, and over two and a half times that of Texas-based Giants that also operate in other states.

If you wanted to make a big leap up this year's Giant 400 rankings, Texas was the place to build houses last year.

Let's not even mention the two Texas-based Supernovas, No. 2 D.R. Horton, in Fort Worth, and No. 4 Centex, in Dallas. Most of the other Texans — even those who also build in other states — seem to be riding their expansive markets (and the ill fortune of non-Texans) to higher ranks.

History Maker Homes, the suburban Fort Worth entry-level builder based in North Richland Hills, Texas, is typical. The former National Housing Quality award winner led by Bryan and Nelson Mitchell grew closings by 25.5 percent over 2006 — from 917 to 1,151 homes — and watched 2006 revenues shoot up 28.6 percent to $160.5 million. That was good for a 33-position advance from No. 203 last year to No. 170 in 2007. Houston-based Giant David Weekley Homes operates in seven states but still pulls more revenue from Texas than anywhere else. Weekley advanced six slots to No. 21 on a 16.2 percent gain in closings and 21.3 percent jump in revenues to $1.54 billion.

Comparing the percentage change in housing completions for Texas-only builders to non-Texas Giants and those based in Texas (but with operations in other states) shows why Texans are climbing the Giant 400 rankings.

A look at U.S. Census data on 2006 residential building permits (because housing completions are not broken out by state) shows Texas up 2.9 percent over 2005 to 216,755. Florida and California were down 28.4 percent and 24.2 percent r espectively. Houston was No. 1 among metro markets (single-unit, 55,105), Dallas/Fort Worth No. 3 (43,751).