Builder reports strong sales, high demand
LGI Homes vaulted into the Chronicle 100’s top 10 for 2019
as the company expanded into new communities and low mortgage rates fueled demand for homes.
Despite the pandemic, The Woodlands homebuilder saw record sales in the first quarter of this year and has since reported continued strong sales as consumers — particularly renters — increasingly look to its moderately priced single-family homes.
“As we work closely with our customers through the mortgage and closing process, they consistently comment that recent events have only increased their desire to relocate their families to the comfort, space and security that single-family homes offer,” Chief Executive Eric Lipar said in a May earnings call. “They’re ready to move out of densely populated living situations and into homes that offer more space and privacy.”
LGI Homes designs, builds and sells singlefamily homes with an emphasis on the entry-level price range.
Since its founding in 2003 with a residential development in Conroe called Summerset Estates, the company’s growth strategy has been to convert renters into homeowners. New home costs are advertised in monthly payments as opposed to their full prices.
LGI expanded outside of Texas for the first time in 2011 with a project in Phoenix. In 2018, the company purchased Raleigh, N.C.based Wynn Homes for approximately $80 million, its largest acquisition to date.
LGI went public in Nov. 2013, issuing more than 10 million shares at $11 per share. The company’s stock recently hit a 52-week high of $103.55.
Today, the company builds in 34 markets in 18 states. It closed 7,690 homes last year — 18 percent more than 2018 — with an average sales price of $239,032, up $8,012 from the previous year.
LGI was No. 10 on Builder Magazine’s 2020 list of top U.S. builders ranked by closings.
The company declined to comment for this story because it was in a quiet period before releasing earnings.
LGI’s revenue rose 22 percent to $1.84 billion last year, up from $1.5 billion in 2018. LGI earned $178.6 million in profit in 2019, up 15 percent from $155 million the previous year.
“Recent events have only increased (customers’) desire to relocate their families to ... single-family homes.” Eric Lipar, chief executive