Upward Glance

One of the tenets of human nature is that our eyes tend to be drawn upward. We gaze on the highest mountains, we track birds in flight and we distinguish familiar forms in oddly shaped clouds. As home builders, we know this inclination in our bones, so we build houses with two-story entries, put vaulted ceilings in master suites and craft tray-ceilinged dining rooms.

In this issue of Professional Builder, we gaze upward at the 400 largest home builders in the country — the Giant 400. We do this not because these companies represent the home building industry more clearly than tens of thousands of other companies. No, we do this to provide a benchmark. Professional Builder has been tracking this group for 39 years. We have information in our vaults about these companies that goes back to 1985. (Vaults may be a misnomer. In truth, it is a bunch of beige file cabinets in a storage room next to some black cabinets.)

While I enjoy the idea of having that information, the real reason we track the Giant 400 is to get a sense of what's going on in the industry. Senior Editor Bill Lurz has worked on the Giant 400 story for 23 years. His article in this month's issue reflects not only a study of this year's group, but an understanding of the last two dozen Giant 400 lists. Put that in the context of Lurz's 30 years working in the home building industry, and you can get a sense of why we are interested in following the largest. It offers us a touchstone on our individual businesses, provides an insight to emerging trends and delivers a measurement of the movements and tectonic shifts of the industry.

The two biggest things I notice about this year's list are that the five Supernovas, the five largest companies, are still widening the gap to the rest of the industry. While I don't ascribe to the notion that they will capture a huge percent of the industry as some analysts have suggested, I am fascinated by their struggles to maintain enough revenue and earnings growth to keep the barons of Wall Street satisfied. That's a hard place to live.

That's also a very different business. For the rest of us, the tens of thousands who represent the meat and potatoes of the home building industry, we can only stare upward at those overarching oaks and wonder what it must be like. Then, quickly, we have to turn our heads back to earth because even at the most simple level — one builder, one house — there are 70,000 items we need to keep our eyes on to satisfy our customer, make our payroll and earn our profit.

Home building is a hard business. It's good to look up every once in awhile.