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K&B Tops Southland Residential Builders : Home building: Focusing largely on first-time buyers, leading L.A.-based developer reports sales volume increase of 55% from 1992 in Times' survey.

March 06, 1994|From a Times Staff Writer

Building more houses than its next two closest competitors combined, Kaufman & Broad Home Corp. has claimed the No. 1 spot on The Times' 23rd annual survey of Southern California home builders.

The Los Angeles-based developer built 2,642 houses and condos in 1993 and sold all but 348 of them, for a sales volume of $434 million, up an astounding 55% from its 1992 sales volume of $279 million.

K&B builds primarily entry-level homes, in a price range of $100,000 to $200,000. The first-time buyer segment of the market has been treated much more gently by the four-year housing recession than the move-up market.

"The entry-level market has and will continue to be the engine that drives the market," said Bruce Karatz, the chairman and chief executive officer of K&B, "as lower prices and interest rates have made home ownership a reality for a broader range of buyers."

In 1994, K&B expects its sales to increase 18% to $512 million. "For well-capitalized builders with the right product for today's buyers, 1994 should be an excellent year," Karatz said.

Kaufman & Broad moved up from the No. 2 ranking in the 1992 survey.

The William Lyon Co. of Newport Beach, which had topped the builders' survey for six consecutive years, did not participate in this year's survey. The Lyon Co. has been trying to work its way out of financial troubles that date back to slow homes sales in 1990 that made it difficult to meet the carrying costs of a huge inventory of land.

The Times mailed nearly 300 surveys to builders in Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara, Ventura and Kern counties. A total of 89 builders responded to the voluntary survey, down from 100 respondents in 1992.

The No. 2 builder was the Fieldstone Group of Companies, based in Newport Beach, which built 1,084 houses and condos and reported 1993 sales volume of $254.4 million, down 15.6% from '92 sales. The company had 49 unsold houses at year's end.

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Fieldstone chief executive Keith A. Johnson is forecasting that the company will do $236 million in sales this year.

Despite Fieldstone' predicted decline, Johnson said, "the upturn for first-time buyers is under way, and will increase in higher price ranges as the year improves." Fieldstone is a move-up developer, building most of its homes in the $200,000 to $350,000 range.

Fieldstone's 1992 sales results were omitted from last year's survey, but the company would have ranked second.

The No. 3 builder is Los Angeles-based Pardee Construction Co., which moved up from No. 8 in the 1992 survey. The company reported 1993 sales volume of $226.5 million, up a whopping 44% from its 1992 results. The company, which built 1,402 houses, condos and apartments last year and sold all but 131 of them, is predicting a 26% increase in business this year.

In the No. 4 spot is Upland-based Lewis Homes of California, which built 1,031 single-family homes and condos and reported 1993 sales volume of $221.6 million, a decline of 4% from '92 results. The company had 111 unsold homes at year-end.

The company is predicting its sales revenue will grow to $250 million this year. "Increases in interest rates and the pickup in the national economy will motivate many shrewd buyers to purchase now, while the window of opportunity is open," said Randall W. Lewis, executive vice president of the family-owned company.

The No. 5 builder is the Presley Companies of Newport Beach, which built 1,178 houses and condos and reported 1993 sales volume of $213.9 million, up 20% from 1992. Presley had 80 homes in year-end inventory. The company is predicting a slight drop in business in 1994 to $204 million.

BUILDING LEADERS

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