Check Out Who Climbed the List: The 2020 Builder 100
The top 200 firms on our annual Builder 100/Next 100 list had a good 2019, but will it be enough to carry them through 2020?
Jennifer Lash / BUILDER / May 25, 2020
Our annual BUILDER 100/Next 100 survey serves as a pulse of the industry—it’s a look at the prior year that attempts to foretell what’s ahead for housing. Except earlier this year, when home building firms across the U.S. were completing their surveys, no one could have imagined the swift, dire impact the novel coronavirus would have on the industry and the overall economy.
The top 100 builders reported a total of 350,003 closings for 2019—an increase of almost 22,000 compared with 2018. Those firms are responsible for the bulk of last year’s closings; overall, the 200 builders on the Builder 100/Next 100 reported 377,167 closings for 2019. Many companies were busy, and 119 of the 200 firms noted that they increased staffing levels in 2019. For the most part, these builders were heading into 2020 with optimism for both housing and their businesses as many industry experts revised down recession probabilities.
“Many economic indicators are positive: Consumer spending and confidence is high, unemployment remains low, and inflation is tame,” wrote Robert Dietz, NAHB chief economist, in his January BUILDER column.
Weeks later, COVID-19 arrived in force, leading to over 20 million jobless claims and a record drop in retail sales in March.
As of April 21, the New Home Pending Sales Index, backed by data from Zonda and Metrostudy, showed a decrease in pending sales. Based on the number of new-home sales contracts signed across the U.S., the index came in at 82.1 for March, representing a 23.9% decrease from March 2019. On a month-over-month basis, new-home sales fell by 33.1% from February to March.
“March is historically a better month than February for new-home sales, but COVID-19 turned that trend on its head, in part due to record-breaking job losses,” said Ali Wolf, Meyers Research chief economist. “Uncertainty and fear are powerful forces.”
We can’t help but wonder what next year’s rankings will look like. While many firms were on an upswing going into 2020, an online survey of our audience in mid-April found that 74.8% of respondents have seen less customer demand during the pandemic, 81% think COVID-19 will impact their 2020 closings, and 35.1% anticipate their revenue for the year will drop 10% to 30%. Looking ahead, 38.5% of respondents expect the effects of the coronavirus to negatively impact their business for the next six to 12 months, and 16.7% are extremely worried that their businesses could permanently close because of the virus.