PulteGroup Inc. (PHM - Analyst Report) recently announced that it intends to relocate its corporate offices to the southeastern state of Atlanta, Ga. in 2014. The company currently operates from Bloomfield Hills, Mich.
The company will continue to operate its Michigan-based homebuilding business from its office at Oakland County, Mich. The shift will bring the company closer to its customers and land investment.
In fiscal 2012, a majority of the company’s homebuilding operations was concentrated in the southeastern states from Northern Virginia through Florida. In the southeastern region, Pulte reported 21.7% increase in number of homes closed, 23.9% rise in number of new orders and 44.9% rise in the number of homes in backlog during first quarter 2013.
Pulte had authorized land and related development investment of $1.4 billion annually for 2013 and 2014. A significant portion of these investments is focused in the southeastern states. The shift in the corporate office is thus expected to be beneficial for the company.
Pulte currently has 380 employees working in Mich, of which 54 will continue in Mich. homebuilding operations of the company. The company believes that there will about 300 to 350 individuals working in offices in Ga. As such, the shift in location is expected to result in relocations and severance of some employees.
Majority of the homebuilding companies are constructing increased number of new homes in order to maintain the required level of inventory to meet growing demand for new homes. Homebuilders like Pulte with significant land positions, broad geographic and product diversity and better capital positions are expected to benefit the most as housing market conditions improve.
PulteGroup currently carries a Zacks Rank #2 (Buy).
Other stocks in the homebuilding sector that are performing well and deserve a mention include D. R. Horton Inc. (DHI - Analyst Report), Ryland Group Inc. (RYL - Snapshot Report) and KB Home (KBH - Analyst Report). While D.R Horton and Ryland carry a Zacks Rank #1 (Strong Buy), KB Home carries a Zacks Rank #2 (Buy).