Lennar is proud to be named once again on Fortune Magazine’s list of Fastest-Growing Companies. The new list for 2015 is the 19th annual in the series, which looks at three-year profit, revenue, and stock growth of public companies. In this article, Chris Matthews of Fortune highlights the reasons why real estate-related companies were able to have a strong impact on this year’s list.
Real estate in America has turned around to such an extent that four of the fastest growing companies (Standard Pacific, M/I Homes, Toll Brothers, and Lennar) in America are home builders, while another five are building materials companies (Eagle Materials, Patrick Industries, PGT, Caesarstone Sdot-Yam, and Deltic Timber). So what led to this resurgence?
Home prices began to recover in 2012, and have continued to surge ever since, with the Case-Shiller index showing home prices rising 30% nationwide since the housing market bottomed early that year. As home prices recovered, so did Americans’ balance sheets.
This paying down of debt (or discharging it in bankruptcy) combined with the recovery of home prices meant that Americans could finally start to think about buying new homes. For builders who survived the financial crisis, the stage was set for a renaissance.
Demographics are on these companies’ side too. The single largest demographic group in the country are echo-boomers who are now in their early twenties and just entering prime home-buying age. And this is good news for the economy too, as investment in residential real estate usually accounts for a large share of total economic output each year. As homebuilders continue to recover, it should lead to faster growth and good jobs for blue collar Americans who have been shut out of the economic recovery.
[See the full list of Fortune‘s 100 Fastest Growing Companies]
