Top executives at the nation’s largest homebuilder aren’t afraid to admit it: Cheap works. Its recent launch into the entry-level market is paying off big, and could be even bigger in the year ahead.
“We were first movers, and we were aggressive first movers,” Texas-based DR Horton’s CEO David Auld said on the company’s quarterly earnings call. “The Express [brand] has been the driver of market share gains.”
Express launched in early 2014, touting no-option, no-frills homes in exchange for prices between $120,000 and $150,000. Prices are now slightly higher, moving with the broader market gains, but still below the nation’s median price. The brand has solid footing in Texas, the Carolinas and Florida, but it is now expanding strongly into Southern California. Those homes will soon sell at over $200,000, but that is still on the low end, given California’s median home price of just over $489,000 in December, according to the California Association of Realtors.
“They are doing the best job of any of the large builders executing at entry level, and I think you have to have that as you go through ’16,” homebuilding analyst Stephen East of Evercore ISI said on CNBC’s “Squawk on the Street.”