As the housing market continues its stellar rebound, especially in large metropolitan areas like Atlanta, there have been a number of mergers and acquisitions within the homebuilding market. For smaller builders, merging with larger companies allows them to offer product in a wider market and to have the exposure they’ve wanted for so long. Larger companies are also granted the chance to save money on labor and operating costs with the increased volume of homes they are producing.
An article published on Builder Online forecasts that mergers and acquisitions will continue into next year. In fact, local mergers have been part of the Atlanta real estate landscape for years now. The merger of Coldwell Banker RMR, Meg & Company and Century 21 Simplicity/Findley in 2011 was a deal that created a top 10 opportunity for local agents. Former No. 2 Atlanta builder D.R. Horton moved to the No. 1 spot with its purchase of Crown Communities in 2014.
The most looming concern still hanging over the building industry is the bidding war that typically happens over land to build new home communities. A booming real estate market and increased construction undoubtedly means there could potentially be a rise in conflict over who gets to buy available land. Instead of buying huge plots of land for the development of massive home communities, there has been a rise in smaller, more intimate communities that are being built on smaller tracts of land. This is beneficial for the consumer and the builder. Smaller tracts typically sell to developers for less, and consumers like the feeling of living in a smaller community and will pay a slightly higher price point for that luxury.
As we move toward 2016 and the market continues to evolve, we look forward to what the future holds in terms of mergers and acquisitions. Suffice it to say, there are sure to be some surprises on the horizon! To stay updated on the latest Atlanta real estate news, subscribe to our daily newsletter here.
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