The entire home builder sector has done well lately, but I don’t think I need to convince this board that LGI Homes might be one of the best in the space:
GI Homes is a homebuilder with a market cap of just over $1 billion. Its small size, though, underscores the huge opportunity it has to grow into something much bigger. And growing it is! When the company reported its second-quarter earnings in August, home sales revenue had increased 45.6% year over year to $324.2 million, and net income grew to $32.2 million, a 55.9% increase year over year. These incredible numbers were fueled by higher home closings, up 34%, and a higher average sales price, up 8.7% – a heady combination for investors.
Nor is there any sign sales are slowing down for LGI Homes. When the company reported its August home closings, it reported it had closed on 596 homes during the month, a 55.6% increase year over year.
LGI Homes specializes in selling homes to people who previously rented and has a special program for buyers who don’t have enough money for a traditional down payment. At the end of August, the company had 76 active selling home communities, a number that seemingly grows every week. In September alone, the company opened its first new community in the Minneapolis area, two new communities in Texas, two new communities near Seattle, and one new community in New Mexico. The best part is that all this growth can be had for a cheap valuation, as LGI Homes sports a P/E ratio of just 14.3 times.
The interesting (for me) take away I had from that article, (apart from how the hell did I not notice Home Depot’s share price story), was the library photo of the prototypical American house.
I hadn’t thought about the consequence for home builders, household architecture or design but if we ever do move to an Everything As A Service including Transport or Mobility As A Service where fleets of self driving cars ferry us all around on demand, it will completely change the look and build of American houses and homes rendering double and triple car ports un-necessary! Maybe lot sizes will shrink or interior space expands - all at the same time as declining household sizes and Gen X retirement & Baby Boomer aged living.
I have half of my 2 car garage filled up with “stuff” and various tools and workbenches. I wish I had a 3 car garage but not so I could put more cars in it.
Modern cars do not need a lot of protection from the weather, so the main use of a garage is to make rain/snow entry easier for the user. But with BEV there are other benefits. A room temperature battery is a happy battery ,pre warming increases range, and a covered plug-in is better.
So you have a tug of war, you need more garages for BEV, but you need fewer garages because people are more likely not to need that second car.
