Homebuilding numbers edge up in annual rankings

Awards for the top 10 area homebuilders by sales and unit volume were presented at HBAR’s forecast seminar last week. (David Clark Photography)

While a shortage of buildable lots across the region remains a concern, the area’s busiest homebuilders continued an upward trajectory in number of homes built and sales volume last year, if the latest local homebuilding rankings are any indication.

At its annual forecast seminar last week, the Home Building Association of Richmond announced its lists of the top 10 member builders for 2022 based on sales and unit volume.

As in previous years, the top three builders remained the same, with Ryan Homes, Main Street Homes and HHHunt Homes taking the No. 1, 2 and 3 spots, respectively. However, there was some movement among the three, with Main Street taking the No. 2 spot from HHHunt, which had landed there the previous two years.

Recovering from a slight dip the previous year, Reston-based Ryan remained on top in 2022 with $384 million in total sales and 925 units sold, compared to $345 million and 891 units in 2021.

Main Street, out of Midlothian, brought in $251 million with 466 units sold last year, up from $140 million and 321 units in 2021. Despite its drop in rank, HHHunt, headquartered in Blacksburg, reported $192 million in sales and 433 units sold last year, compared to its 2021 numbers of $162 million and 435 units sold.

HBAR’s numbers are determined from data supplied by builders and research firm Integra Realty Resources–Richmond.

An aerial shot of Stanley Martin’s ReTreat at One development in October 2022. (Image courtesy Stanley Martin Homes)

The biggest jump in the annual rankings came from Stanley Martin Homes, which came in fourth on both lists with $125 million in sales and 328 units sold. The Reston-based builder, whose local output has picked up with projects such as the massive ReTreat at One in Henrico, had come in at the lower end of the rankings the previous year with $69 million and 203 units sold.

D.R. Horton went in the opposite direction, dropping from sixth to tenth in the sales volume rankings with $77 million in sales last year, compared to $85 million in 2021. The Texas-based builder slipped one ranking in unit sales, dropping from seventh to eighth with 177 units sold last year, compared to 217 the previous year.

Rounding out last year’s top 10 sales list were No. 5 Eagle Construction of VA ($117 million), No. 6 Eastwood Homes ($115 million), No. 7 CraftMaster Homes ($96 million), No. 8 RCI Builders ($93 million) and No. 9 StyleCraft Homes ($80 million). On the home closings list, Eastwood placed fifth with 226, StyleCraft sixth with 202, Eagle seventh with 188, CraftMaster ninth with 159, and RCI 10th with 142.

A tally of all of the builders on each list showed that sales volume among the top 10 totaled $1.5 billion in 2022, while new home closings totaled 3,246. Both figures are up from previous years: $1.3 billion and 3,162 homes in 2021; $1.1 billion and 2,916 homes in 2020; and $995 million and 2,684 in 2019.

While the numbers appear to show increasing productivity and sales among area builders, HBAR CEO Danna Markland has cautioned that they do not reflect the full picture of market activity across the region, as some builders may have capped or put holds on home sales in certain communities to balance out production levels.

Based on self-reported builder data (from a sample of 15 builders) and historical reports, Markland said 2022 closed out to be a normalizing market, with total contract sales for the year decreasing 21 percent, to 2,763, compared to the previous year. She said that figure is similar to contract totals in 2017 and ’18, as well as those of 2003 and ’04.

Danna Markland

Describing ’17 and ’18 as “categorically normal markets,” Markland said in an email, “There is still demand in Richmond.”

In a panel discussion put on last month by the VCU School of Business’s Kornblau Real Estate Program, Markland elaborated on what those numbers mean for the local market heading into 2023.

Noting the decline in sales that was seen last year, Markland told the panel, “That’s simply a sales demand that is normalizing. That’s consistent with 2017 and 2018 markets.

“The first few weeks of January, builders locally here have seen a real strong increase in traffic. In December, we saw an uptick as well. So, demand is in fact there,” she said. “You hear about this slowdown in the market, and I would say that’s nothing more than we would see under normal circumstances. That’s the good news.”

Markland added that what’s keeping builders up at night heading into this year is not demand but a lack of lot inventory.

“If you look at preliminary lot inventory sales from this past quarter compared to the previous fourth quarter, those have gone down in almost every locality in our region. That’s not a symptom of demand,” Markland said. “If you want to go out and purchase lots, there’s really not the inventory out there to do it.”

Describing the region as being in “an inventory crunch,” Markland added, “That’s the reality that’s going to play a leading role in 2023 and beyond for the Richmond region.”