KB Home (KBH), Housing Competition Heats Up Out West

Page 1 of 2

KB Home (NYSE:KBH) has been scooping up acreage in California as it prepares to develop new housing communities in the San Francisco Bay area.  The Los Angeles-based home builder just acquired sites for 182 new homes for a pair of communities in Dublin, California. KB Home is also expanding its Southwestern footprint in Austin, Texas where it plans to develop GeorgeTown Village, which will consist of 184 new home sites.

The developer is also doing something that is reminiscent of the auto industry. KB Home is starting an in-house financing arm through a partnership with Nationstar Mortgage Holdings Inc (NYSE:NSM). The new division, dubbed Home Community Mortgage, is structured as a limited liability company. It will provide financing options to KB Home customers and an added revenue stream for the home builder.

KB Home (NYSE:KBH)Last month, KB Home announced that its quarter-to-date preliminary net orders are trending 54% above 1Q 2011 levels. Shares of KB Home are up 14% year to date and the stock is slightly below its 52-week high.

Housing IPO

Nonetheless, KB Home, along with the rest of the housing sector, must make way for some new competition. Tri Pointe Homes Inc (NYSE:TPH) recently completed a $233 million IPO in which its shares advanced 12%. The newly public company expects to net $156.3 million and intends to invest in land, development, and home construction throughout the West and Southwest with the proceeds.

While TRI Pointe isn’t entirely new to the housing scene, as it was formed at a precarious time for housing in 2009, it is new to the equity capital markets. TRI Pointe owns some 9,600 lots across California, Arizona, and Colorado, according to the company’s S-1 filing. Sales at the company increased from $4.1 million in 2010 to $26.5 million in September 2012. TRI Pointe has yet to attain profitability.

TRI Pointe Homes was formed after the worst of the housing crisis had surfaced. Management began making land acquisitions in 2010 upon receiving a capital injection from Starwood Funds. As a result, TRI Pointe doesn’t own any “distressed legacy assets” in economically stagnant places, the company indicated in its S-1 filing.

Although TRI Pointe Homes is investing in California, which is still recovering from the housing crisis, it was able to select its properties with the added benefit of hindsight of the credit crisis, while some of its competition may still be left with unwanted land. Timing has helped TRI Pointe in its recruiting efforts, and the company is led by several industry veterans from William Lyon Homes, which was a publicly traded company through 2006.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!