Ryan grabs the lead in builders' race Houses: Ryland Homes, last year the biggest seller of new houses in the area, has changed its strategy, leaving Ryan Homes to surge ahead of it in new-home sales.

June 23, 1996|By Daniel H. Barkin | Daniel H. Barkin,SUN STAFF

Last year, Ryland Homes, based in Columbia, still clung to the lead in new-homes sales in the Baltimore region. Ryland had 10.3 percent of the 1995 sales; Ryan had 10.1 percent. Only 17 homes separated the two firms.

But in the first quarter of 1996, Ryan Homes -- headquartered in McLean, Va. -- pulled ahead, and decisively so.

Ryan sold 291 homes, for an 11.1 percent market share, compared with 155 sold by Ryland, for 5.9 percent, according to figures compiled from builders by the Legg Mason Realty Group Inc.

Part of the reason is that Ryan was selling homes in 46 projects in the first quarter of this year, compared with 41 during the same period last year. By contrast, Ryland was selling homes in 31 subdivisions, down from 43 in 1995's first quarter, according to Legg Mason.

Meanwhile, the average Ryland sales price has increased more than Ryan's, according to the survey, particularly for detached single-family homes. Ryland's detached units sold for an average price of $213,602, compared with $197,182 a year ago. Ryan's detached homes sold for $184,479 in the first quarter, up just slightly from the $182,409 of a year ago.

One of the most dramatic differences has been in townhouse sales.

Ryan grabbed 13.8 percent of the market share in the first quarter, almost twice Ryland's 7 percent. During the first quarter of 1995, Ryland had 17.9 percent of the new townhouse sales in the market, compared with Ryan's 10.4 percent. Here, too, Ryland's prices are higher, running an average of $136,826 compared with Ryan's $117,881. A year ago, the two companies were just around $5,000 apart, according to the Legg Mason figures.

"We've had to find additional ways to bring out costs down," without sacrificing quality, said Bob Coursey, marketing director for Ryan. "This is not a market where you can raises prices when costs go up," he said.

Coursey said that in the first quarter, "We had a very attractive interest rate environment, very sound land positions, and a good mix of product offerings in the price segments that were selling well."

Also, "some of our competition decided to do business elsewhere or to a lesser degree," added Coursey. "That doesn't hurt, either."

Ryland has previously said it planned to shift the focus of its homebuilding efforts away from the mid-Atlantic region -- where the new housing market has been sagging in recent years -- to faster-growing areas of the country.

Last year, the Baltimore metropolitan area was the 61st market in new residential units per 100 households, according to a study by Chicago Title. For example, Las Vegas had 6.81 new units for every 100 existing households in 1995. The Baltimore area had 1.25, down from 1.75 in 1992, and below the national average of 1.37, according to Chicago Title.

Ryland has reported that its new mid-Atlantic orders in the first quarter dropped 40 percent compared with the first quarter of 1995, which is in line with the sales results in the Legg Mason survey.

Ryland sold 155 Baltimorearea homes -- detached and townhomes -- in the first quarter this year, a 50 percent drop from the 315 sold in the first quarter of 1995.

Despite the drop in volume, Ryland's homebuilding segment turned a pretax profit of $1.3 million, compared with a $4.3 million loss in the 1995 period.

"We are focusing on improving the margin of each unit we close, rather than increasing the volumes of homes we sell," R. Chad Dreier, Ryland's chairman and chief executive, said in April.

Ryland's strategy has come at a time of intense jockeying for position in the Baltimore market. Ryan wasn't the only builder to gain market share over the past year. Its sister firm, NVHomes, nearly doubled its Baltimore-area sales, from 44 to 79.

NVHomes markets to a more affluent buyer; its average detached sale price was $328,269 in the first quarter, according to Legg Mason, up nearly $21,000 from a year ago. Both Ryan and NVHomes are owned by NVR Inc., one of the nation's largest builders.

The largest builder of new homes in the United States -- Pulte Home Corp. -- also gained ground in the Baltimore region in the first quarter. Pulte, ranked third in the region behind Ryan and Ryland, moved from 3.9 percent in the first quarter of 1995 to 5.2 percent in the first three months of this year, according to Legg Mason.

Pulte sells detached homes for an average of $224,384 and townhomes for an average of $137,146, according to Legg Mason.

Pub Date: 6/23/96

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