Major Builders Acquiring Smaller Companies
Washington, DC, July 16, 2013 -- Smaller builders are being acquired at a fast clip by the better capitalized major public homebuilders, according to a story in the Wall Street Journal.
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Large builders have returned to strong profits, partly because their homes are selling at higher prices and many were able to buy land cheaply during the downturn.
But according to the Journal story, what sets the big builders apart is access to capital, as big builders issued a record $8.1 billion in bonds last year.
Meanwhile, private builders have generally relied on small or regional banks for funding, which have been slow to get back into construction and development financing.
According to the FDIC, the dollar value of outstanding construction and development loans has declined 68% since the peak of the market in early 2008.