Industry NewsOpinion

Home builders in for cutthroat competition

Guest perspective: Sprawl creates unique problems, opportunities
Published on Mar 3, 2006

This is going to be the year that the best builders distinguish themselves from the pack. The substantial sprawl that has occurred in many markets is resulting in very competitive situations where only the strongest will survive. Supply Now Meeting Demand Thanks to strong demand from consumers and speculators, home sales have been steadily rising for the last decade. In response to that demand, the building industry has been growing rapidly, buying expensive land close to the job centers and much less expensive land further from the job centers. After many years of undersupply, we are now building approximately 2.2 million housing units, which is 5 percent to 15 percent more than we need (according to three different credible sources). We need to slow down construction in certain submarkets. Since I cannot envision a scenario where this will occur, I believe we need to brace ourselves for a very competitive year. Submarket Issues Since the land furthest from the job centers is mor...