DR Horton may be one of the better home builders to own as "the bottom is called once again".
I don't ever recall working on a DR Horton site that wasn't at least 200 acres. Many are over 500 acres. The difference between DHI's land bank and the land bank of other builders is DHI's land hasthe ability to generate revenues. Farmers lease them back. The last contact I had with farmers leasing back DHI land was way back in 2002. It was for pennies on the dollar. The primary reason DHI did it was to spread goodwill back to the farmers and do a little networking while they were at it. Dairy farmers often lease land to grow the feed for their cows. If these farmers ever wanted to sell their own property they knew who to call.
Crop prices were much lower then than they are today. I question whether DHI is still leasing land back well below prevailing rates. One thing for sure is. Their land banks of multi hundred acre farms have better revenue generating ability than most 3 or 4 acre plots the other home builders have.
I doubt that the land banks of DHI are the dead money that needs to be liquidated to pay taxes that many other builders are stuck with.
$16.93 (04/04/08)
