Residential Developers Market Size Expected To Reach Or Exceed $200 Billion In 2023
FinancialNewsMedia.com News Commentary
PALM BEACH, Fla., Feb. 23, 2023 /PRNewswire/ — Like many industries and markets, the residential real estate market was adversely affected by the pandemic. However, despite this disruption, the housing market is resilient with increasing homeownership in this sector. Industry reports actually see a rise in revenues through 2028. One such report from IBISWorld projects that the Housing Developers market size, measured by revenue, of the Housing Developers industry is expected to reach or exceed $202.7bn in 2023. It added that: “A rising homeownership rate indicates growing consumer preference toward purchasing property rather than renting, increasing demand and industry revenue. The homeownership rate will increase in 2023, representing a potential opportunity for the industry. The residential real estate market in the United States is expected to register a CAGR of over 5.77% during the forecast period. Furthermore, the COVID-19 impact was severe on the market. Despite the pandemic crisis, residential real estate in the country is in the recovery phase, as the sales in the country quickly bounced back to pre-pandemic levels.” Another report from Mordor Intelligence added: “Since the start of the COVID-19 pandemic, the property market in the United States has been thriving. Many purchasers took advantage of the low-interest rates to restructure their mortgages, relocate, or take a step toward the American Dream by purchasing their first home. Owing to this, the number of home sales increased sharply…and has since stayed higher than before the pandemic. Prior to the pandemic, home prices had been on the rise, but with demand at an all-time high in 2020, the Freddie Mac House Price Index recorded a startling 11.3% increase.” Active companies in the markets this week include Lennar Corporation (NYSE: LEN), Toll Brothers, Inc. (NYSE: TOL), International Land Alliance, Inc. (OTCQB: ILAL), KB Home (NYSE: KBH), PulteGroup, Inc. (NYSE: PHM).
At the beginning of 2021, about 60% of properties were sold above their advertised prices as a result of the ‘race for space’ among homebuyers. Although the market has begun to moderate, the lack of available inventory and rising construction costs are anticipated to keep pushing up the price of homes. The price of single-family homes increased by more than 20% in numerous states of the United States. As of the end of 2021, some of the states with the highest property appreciation rates were Arizona, Utah, Idaho, Florida, and Tennessee. Furthermore, the mean value of a single-family home was significantly higher than the average sales price of both new homes and existing homes in states like California, Washington, and Massachusetts.
International Land Alliance, Inc. (OTCQB: ILAL) BREAKING NEWS: International Land Alliance Reports Record January Revenue – Topline Revenues exceed $1.3M for Best January in Company History – International Land Alliance, Inc. (“ILAL” or the “Company”), an international land investment and development firm, today reported sales for January 2023 of $1,340,000, compared to a total $9,000 reported for the three months ended March 31, 2022.
Roberto Valdez, Chairman and CEO of ILAL, noted that the Company is already reaping the benefits of the new officers brought in January. Valdez tabbed Michael Cresci to be the Vice President of Sales and Robert Rios as Vice President of Marketing.
“What investors are seeing is the precise execution of our business plan resulting in a record revenue month for January and Michael and Robert are already making significant contributions,” Valdez said. “We will continue to expand our marketing and sales efforts in this quarter to efficiently move our current inventory.”
Not only did gross revenue numbers for January exceed what was recorded for Q1 of 2022, but for the entire 2022 fiscal year as well.
“While we are extremely pleased with the January results, no one at the Company is sitting around patting each other the back,” Valdez added. “We have set a tremendously high bar for success and I believe we have the right team in place to exceed those goals.” CONTINUED… Read this and more news for ILAL at: https://www.financialnewsmedia.com/news-ilal/
In other developments in the markets:
Lennar Corporation (NYSE: LEN), one of the nation’s largest homebuilders, recently reported results for its fourth quarter and fiscal year ended November 30, 2022. Fourth quarter net earnings attributable to Lennar in 2022 were $1.3 billion, or $4.55 per diluted share, compared to $1.2 billion, or $3.91 per diluted share in the fourth quarter of 2021. Net earnings attributable to Lennar for the year ended November 30, 2022were $4.6 billion, or $15.72 per diluted share, compared to $4.4 billion, or $14.27 per diluted share for the year ended November 30, 2021. Excluding mark-to-market adjustments on technology investments in both years, and homebuilding impairments and deposit write-offs in 2022, fourth quarter net earnings attributable to Lennar in 2022 were $1.5 billion, or $5.02 per diluted share, compared to fourth quarter net earnings attributable to Lennar in 2021 of $1.3 billion, or $4.36 per diluted share.
Stuart Miller, Executive Chairman of Lennar, said, “We are pleased to announce our fourth quarter results which were consistent with our previously articulated strategies. In the fourth quarter, our earnings were $1.3 billion, or $4.55per diluted share, compared to $1.2 billion, or $3.91 per diluted share for the fourth quarter last year. Excluding mark-to-market losses on our technology investments, homebuilding impairments and deposit write-offs, fourth quarter earnings were $1.5 billion, or $5.02 per diluted share, compared to $1.3 billion, or $4.36per diluted share for the fourth quarter last year, excluding mark-to-market losses, a 10% and 15% increase year over year, respectively.”
Toll Brothers, Inc. (NYSE: TOL), the nation’s leading builder of luxury homes, recently announced results for its first quarter ended January 31, 2023.
Douglas C. Yearley, Jr., Chairman and Chief Executive Officer, stated: “We are very pleased with our strong first quarter results, as we exceeded the midpoint of our guidance on all key metrics. We delivered 1,826 homes and generated $1.75 billion in home building revenue, increased our adjusted gross margin by 190 basis points year-over-year to 27.5%, and decreased our SG&A expense, as a percentage of revenue, by 130 basis points compared to last year’s first quarter. As a result, we grew pre-tax income by 26% year-over-year and earnings per share by 37%. With a quarter-end backlog of $8.6 billion and 7,733 homes, we continue to project solid results in FY 2023. We are therefore reaffirming our full FY 2023 guidance of an adjusted gross margin of 27.0% and $8.00 to $9.00 of earnings per share.
KB Home (NYSE: KBH) recently announced the grand opening of its newest master-planned community, Sunset Ranch. The new neighborhood is located in popular Ontario, California and will host many planned, family friendly amenities, including a park with a dog park, children’s playground, sports field, picnic areas and pickleball courts. The homebuilder’s first new community within the master plan, Torrey at Sunset Ranch, will open this weekend and feature new homes designed for the way people live today, with attractive design features like modern kitchens overlooking large great rooms, expansive bedroom suites with walk-in closets, and ample storage space. The new floor plans feature up to five bedrooms and three baths. Families will appreciate that the master plan is zoned for the award-winning Ontario-Montclair School District.
What sets KB Home apart is the company’s focus on building strong, personal relationships with every customer, so they have a real partner in the homebuying process. Every KB home is uniquely built for each customer, so no two KB homes are the same. Homebuyers have the ability to personalize their new home, from floor plans to exterior styles to where they live in the community. Their home comes to life in the KB Home Design Studio, a one-of-a-kind experience where customers get both expert advice and the opportunity to select from a wide range of design choices that fit their style and their budget. Reflecting the company’s commitment to creating an exceptional homebuying experience, KB Home is the #1 customer-ranked national homebuilder in third-party buyer satisfaction surveys.
PulteGroup, Inc. (NYSE: PHM) recently announced financial results for its fourth quarter ended December 31, 2022. For the quarter, the Company reported net income of $882 million, or $3.85 per share. Adjusted net income for the period was $832 million, or $3.63 per share. Adjusted net income excludes a $65 million net pre-tax benefit from adjustments to insurance related reserves and a $49 million pre-tax gain in JV income relating to the sale of commercial property, partially offset by a $31 million pre-tax charge associated with the Company’s decision to exit certain land-option agreements and a tax charge of $12 million from deferred tax valuation allowance adjustments. Prior year reported net income was $663 million, or $2.61 per share. Adjusted net income for that period was $637 million, or $2.51 per share, after excluding a $23 million net pre-tax benefit from adjustments to insurance related reserves and a tax benefit of $9 million from deferred tax valuation allowance adjustments.
“Within a rapidly evolving housing market, our organization remains focused on driving operational performance, ensuring an appropriate cadence of production, and intelligently managing our balance sheet,” said Ryan Marshall, PulteGroup President and CEO. “Consistent with this focus, our fourth quarter results show closings up 3%, with a 200-basis point increase in gross margin and a 48% increase in earnings per share. Our strong fourth quarter results allowed PulteGroup to lower its debt-to-capital ratio to 18.7% and deliver a full year return on equity of 32.9%.”
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