Dive Brief:
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Toll Brothers has bought Boise, ID-based Coleman Homes — a leading homebuilder in the metropolitan area since 2007 — in a cash deal, according to the Philadelphia Business Journal.
- In 1997, Toll Brothers purchased Coleman’s former Las Vegas homebuilding business.
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With this latest acquisition, Toll Brothers gets roughly 1,400 owned lots and 350 controlled lots in the Boise area. The company plans to build homes targeting young, first-time buyers, the Business Journal reported.
Dive Insight:
Consolidation in the U.S. homebuilding market continues. Berkshire Hathaway subsidiary Tennessee-based Clayton Homes has been snapping up builders to help grow its site-built business. Meanwhile, Japanese builders are entering the U.S. single-family market through acquisitions. In the most recent example, Japan-based builder Daiwa House Group announced its plans to purchase the Washington, DC-based Stanley Martin for $251 million.
With its purchase of Coleman Real Estate Holdings, Toll Brothers can plant a flag in the emerging tech hub of Boise, where employers include Hewlett-Packard, semiconductor company Micron Technology and Microsoft. Real estate listing website Zillow included Boise on its ranking of the top 10 housing markets to watch in 2016, citing high home appreciation values and low unemployment.
A healthy job market — often with a tech bent — and high — but not excessively so — home values are attracting younger homebuyers, many of whom are first timers. For them, homeownership potential lies in secondary metropolitan statistical areas, Realtor.com Chief Economist Jonathan Smoke told Construction Dive in October. In markets like Pittsburgh, Baton Rouge, LA, and Des Moines, IA, first-time buyers account for at least 40% of the purchase mortgage market, Smoke said.
Nationally, first-time buyers account for a 35% share of home sales, according to the National Association of Realtors’ 2016 Profile of Home Buyers and Sellers, up from 32% in 2015 and the highest share since 2013. Builders are betting on first timers to continue to increase their share. This fall, Meritage Homes debuted its LiVE.NOW. category of homes targeting this segment with properties that span 1,800 square feet to 2,500 square feet and are priced from the low $200,000s. The homes also include green features like spray foam insulation.
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