Home sales in the U.S. are growing at an impressive pace. In July, sales of existing homes increased 10.3% over last year, hitting the highest point since February 2006. Additionally, sales of new homes increased at an even greater pace that of 26%.
Tucson has had the highest new home sales and home starts in the first half of this year since 2010, according to SAHBA, The Southern Arizona Home Builders Association.
However, housing supply has not increased in tandem with demand. There was a brief period of increase in 2015, but supply has lost momentum once again just as demand has picked up.
DR Horton (NYSE: DHI) has a strong opportunity ahead of it as plans to tap the shortfall in supply in the housing market to bring more customers toward itself. The good thing is that the company is increasing its community count at a terrific pace.
Since August, DR Horton has bought 63-lots in Sycamore Vista for $2.52 million ($40,000 per lot) for finished lots of 70’x 110’ and 120’. This will be an expansion for the existing Horton community in Sycamore Vista where they purchased 40 SFR lots in late 2013. Located in the southeast submarket of Tucson, this community has been one of its top performing since opening. The seller was NT Properties LLC, a group of local investors. Dan Feig and Aaron Mendenhall of Chapman Lindsey represented D.R. Horton. For more information see RED Comp #3232.
At Eagle Point Estates, in the western submarket of Tucson, DR Horton also purchased 6-SFR lots for $225,000 ($37,500 per lot). This was a part of a rolling option agreement for 83-lots at Eagle Point Estates. The seller, Tierra Valencia of Tucson is an affiliate of the Estes Companies (Bill Estes III, manager). Dan Feig and Aaron Mendenhall of Chapman Lindsey represented DR Horton. For more information see RED Comp #3211.
In another option agreement, DR Horton purchased 5-SFR lots at Sunset Pointe at Midvale Park for $169,600 ($33,920 per lot). Horton is buying a total of 55-lots in this subdivision platted in 2007, with 3,600-square-foot minimum lot sizes. The seller is D.B.S. Midvale, LLC (Bill Estes, Jr.) of Tucson. Dan Feig and Aaron Mendenhall of Chapman Lindsey represented D.R. Horton. For more information see RED Comp #3201.
Horton's revenue is also up 37% year-over-year due to an increase in new home sales according to its July financial report. As a result, the company's net income almost doubled to $221.4 million from $113.1 million in the prior-year period. Going forward, it is quite likely that Horton will be able to sustain its impressive growth as the company is making the right moves to tap a fast-growing housing market.
To learn more Dan Feig and Aarron Mendenhall should be reached at 520.747.4000.