Executive Summary

Home builders enjoyed a strong year in 1996, with all but six of the top 25 residential developers in L.A. County experiencing sales growth over the previous year and double-digit sales increases by such big players as Kaufman & Broad and Shea Homes.

Many developers also increased the number of homes they built last year, especially Kaufman & Broad, which constructed 7,457 units in 1995 and 10,249 in 1996. A big portion of Kaufman & Broad’s growth comes from its January 1996 acquistion of San Antonio-based Rayco, which instantly made the Westwood-based giant the second-biggest home builder in Texas.

Some developers on the List reported selling more homes than they built in 1996 the result of inventory from previous years finally being sold.

Pacesetter

Kaufman & Broad Home Corp.

CEO: Bruce Karatz

The biggest residential developer in California, Westwood-based Kaufman & Broad has enjoyed a steep incline in its stock value in recent months thanks to its own earnings gains and a general change in Wall Street’s outlook for home-building companies.

Investors started getting bullish on residential development companies earlier this summer, apparently after concluding that an anticipated recession isn’t going to happen and the national housing market will continue to be strong.

Kaufman & Broad, whose stock was trading in the $13-a-share range in the spring, was trading above $20 a share last week.

One important factor in closing sales for Kaufman & Broad is that it is one of the few developers with its own mortgage banking subsidiary Kaufman & Broad Mortgage Co.