Lennar has cemented its status as a dominant force in San Antonio’s residential construction market.
The Florida-based builder pulled 534 residential permits in the third quarter, accounting for 61 percent of the 875 permits filed across the city, the San Antonio Business Journal reported.
Lennar has become one of the most active homebuilders in the city. KB Home filed 47 permits, accounting for just 5 percent of residential filings in the third quarter. Ohio’s M/I Homes, which has been increasing its activity in San Antonio, pulled the third-most permits, although the number wasn’t reported.
Lennar’s rise as the city’s top residential home builder has been swift, with the company holding the top spot for the past two years. Lennar and KB accounted for 40 percent of homebuilding in San Antonio last year, although both were less active than the previous year, the outlet previously reported without hard numbers.
Lennar’s San Antonio focus is on building entry-level homes, primarily in the city’s South, West and Far West sides, where land for large-scale developments is cheaper. Building permits don’t guarantee immediate construction, but Lennar’s massive land holdings in these areas suggest that it is positioning itself to meet the growing demand for housing.
Areas around downtown, midtown and the north and northwest sides have seen much less residential development due to high land prices and the scarcity of large, affordable plots.
San Antonio’s housing market continues to show strength, despite a drop in the number of permits filed compared to the first half of the year — 1,052 and 976 in the first and second quarters. Home starts increased 30 percent in the second quarter, compared to the previous year, outpacing Houston (22 percent), Dallas-Fort Worth (13 percent) and Austin (6 percent).
Lower-end homebuilding is poised to be a profitable bet, if Berkshire Hathaway is correct. Warren Buffet’s firm invested $814 million in volume homebuilders last year, including $726 million in Arlington-based D.R. Horton. It also purchased more than 152,000 shares in Lennar and 11,000 shares in NVR.
— Andrew Terrell
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