D.R. Horton Inc. said it paid $210 million for the homebuilding operations of Crown Communities, the largest residential developer in the Atlanta area, where new-home demand is still recovering from the recession.
Crown Communities, ranked the 28th-largest U.S. homebuilder by Builder magazine, sells in Georgia, South Carolina and Alabama, a region where D.R. Horton, the largest U.S. homebuilder by volume, is expanding and introducing a line of lower-cost residences for first-time buyers.
"We are excited about combining the two largest builders in the Atlanta area to establish double-digit market share for D.R. Horton," Donald R. Horton, chairman of the Fort Worth, Texas-based company, said in a statement today.
New-home sales fell 14.5% in March from February to an annual pace of 384,000, as rising prices and mortgage rates and inclement weather slowed shoppers, the Commerce Department reported last month. The pace was about 58% of the average for new-home sales dating back to 1963. Building permits in Atlanta last year were 55% of the local average from 1990 to 2012, according to a report yesterday by property-data firm Trulia Inc.
D.R. Horton bought Breland Homes, the 38th-largest U.S. builder, with operations in Alabama and Mississippi, in 2012. Last month, D.R. Horton announced its Express Homes brand, which sell for as little as $120,000, a price point easier to reach in the Southeast than in costlier parts of the country.
The developer sold 25,712 homes in the 12 months through March. Its homes sold for an average $250,400 in the Southeast, compared with $278,900 nationally and $444,500 in the West, in the most recent quarter, the company said in an April 24 regulatory filing.
Crown Communities last year sold 1,540 homes for $375 million, with an average price of $244,000, D.R. Horton said. Closely held Crown, based in Conyers, Ga., has a backlog of 420 homes in production, 640 homes in inventory and 2,350 lots under ownership, along with 3,400 lots under option contracts.