Columbus-based home builder M/I Homes, Inc. announced it will be acquiring one of the area’s larger local builders, Pinnacle Homes. M/I moves into MI, joining Pulte and Toll Brothers as the only publicly traded national builders in this market. Details of the deal were not disclosed, other than Pinnacle co-founder Howard Fingeroot will stay on as area president, overseeing the Metro Detroit market. According to Builder Magazine, Pinnacle currently has 1,000 home sites across the region; they closed 217 homes last year.
Detroit has never really been a magnet for national builders. With a population of 4.3 million in the metro area, having only 3 national builders active in our market still pales in comparison with smaller metro markets in the region. Indianapolis, for example, has a population of around 2 million in their metro area, but more than 10 national builders. Our theory has always been that the Detroit new home market is geared towards move-up buyers due to higher land costs, which means a smaller pool of buyers and greater risk of exposure when the market slows down. With new homes oriented towards first time buyers in many (most?) other markets, the lower price-points (and lower land costs) make it easier for builders to weather slowdowns, which is more attractive to the national builders who have customers and shareholders to keep happy.
Regardless, we’re excited to see how M/I impacts our market, and look forward to watching the transition. If you aren’t familiar with their plans, they offer a very cool 5-level split concept (check out the Wright or the Sheffield floor plans) that allows for a dramatically different look than your parents split-level from the 70’s, and would be totally unique to our market.
Lou Bitove & Jeff Bortnick, owners of The New Home Experts®, have more than 30 years combined experience in real estate, much of that with builders like Pulte & Toll Brothers. They also provide market research for area builders, developers and national firms. If you’re considering a new home, remember: the builders rep represents the builder, not you. Work with the only local agents in Metro Detroit to specialize in new homes, and save money in the process – ask us how!
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