Lecture Notes: Ranking Home Builders in Houston

Introduction

Discussion on issues with poorly built homes and the impact on homeowners.
Importance of choosing the right home builder, especially in Houston, which has over 40 production homebuilders.
Presentation aims to rank builders from the worst to the best to aid in informed decision-making.

Examples: D.R. Horton, Lennar, KB Homes, K. Hovnanian.
Issues: High volume, low-quality builds using the cheapest materials.
- Common problems: mold, plumbing, foundation issues.
Recommendation: Conduct thorough home inspections before and after purchase.
- Importance of maintenance due to poor aging and low appreciation rates.

Examples: Meritage, Brightland, LGI, Perry Homes.
Characteristics: A step above D-ranked; offer more customization and better home build quality.
- Varied experiences: can have either great or poor build quality.
- Construction manager plays a crucial role.
Pros: More variety in floor plans and design features.
Cons: Similar construction material quality to D-ranked builders; mixed customer service.
Recommendation: Preferred over D-ranked for entry-level due to better diversity and slightly better neighborhood quality.

Examples: David Weekley, Chesmar, Coventry.
Characteristics: Considered the "sweet spot"; not premium but not entry-level.
- Offers more standard features and customization.
Pros: Build in upper to middle-tier neighborhoods with a higher appreciation rate.
- Suitable for starter or move-up homes.
Recommendation: Good balance of quality and cost.

Examples: Perry, Highland, Newmark, Shea.
Characteristics: Best quality in production home building; expensive but high in value.
- Focus on customer service, innovative designs, luxury experience.
Pros: Retain more value, last longer, and offer a special feel.
- Build in strategic, high-appreciation areas.
Recommendation: Suitable for forever homes or move-up homes.
- Consider smaller A-B level homes over larger entry-level ones for better quality and resale value.