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DR Horton Builders is making a move in the Western Pennsylvania market, in direct competition with Ryan Homes, the current number one builder in the area.  Hidden Springs in Connoquenessing is one of DR Horton's newest neighborhoods, shown on Monday, Sept. 25, 2023.
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‘We're here’: National homebuilding giant D.R. Horton sets sights on Pittsburgh

Lucy Schaly/Post-Gazette

‘We're here’: National homebuilding giant D.R. Horton sets sights on Pittsburgh

D.R. Horton, Inc., the nation’s largest homebuilder by volume, is laying footprints in the Pittsburgh region.

While large-scale developments likely will take a year or two before coming to fruition, the homebuilding goliath crossed over the Pittsburgh threshold in July with the purchase of dozens of individual vacant lots in Butler County with plans to build and sell its own houses.

“That’s just how they get their toe in,” said Mike Netzel, a team leader at Keller Williams Realty in Pine. “That’s the one shot across the bow that announces — ‘we’re here.’ ”

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The Arlington, Texas-based home construction company is a mass production builder known for erecting 20,000 to 25,000 homes a year in hot markets such as Texas and Florida. D.R. Horton closed 82,930 homes during the 12-month period ended Dec. 31, 2022, according to its first quarter 2023 earnings report.

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“Each market within our footprint contributes to the overall goal and helps us remain the No. 1 builder by volume,” said Jacquelyn Lantz, sales manager for D.R. Horton’s Pittsburgh market.

Ryan Homes currently is the top builder in Pittsburgh, a position it has held for decades. Pittsburgh is the hometown of Ryan Homes founder Edward Ryan.

Ryan Homes is based in Reston, Va., under the NVR corporate umbrella, which has a market capitalization of $19.23 billion. While Ryan Homes remains No. 1 in this market, the arrival of D.R. Horton, with a market capitalization of $36.35 billion, threatens — at the very least — to chip away at the dominating market share the builder has enjoyed here for decades.

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Ryan Homes representatives did not respond to interview requests.

Local real estate analysts are inclined to applaud just about any workable solution to closing the housing inventory shortage that has existed in this region for more than a decade. Real estate agents have been fighting over a dwindling pool of listings as the number of licensed agents outnumbers available homes.

“Anything that we can do to build more houses and create more inventory helps the consumer,” said Dennis Cestra, head of O’Hara-based Howard Hanna Real Estate Service’s Pennsylvania division. “If it creates more housing, that’s definitely something that we need desperately in Western Pennsylvania.

“And [D.R. Horton’s arrival] might create a little bit of diversity in housing because they build many different types of products.”

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Hitting the ground running

D.R. Horton plans to develop and build a variety of community sizes across the Pittsburgh area while helping to address this region’s housing supply shortage problem, Ms. Lantz said.

The company currently is building in 33 states and 113 markets, she said. But it recognizes that some markets cannot support thousands of new units per year.

“Like most of the country, the demand for housing outweighs the supply here, which is attractive,” she said. “Pittsburgh needs new homes at affordable price points, and D.R. Horton is uniquely positioned to serve that need. ... D.R. Horton is interested in having a presence in any market where we can deliver hundreds of quality new homes on an annual basis. We are excited [to] offer homes at price points that typically have not been available to consumers in this market.”

Insider sources say D.R. Horton is under contract to buy tracts of raw land in Plum and Moon; those sites are at least a year or two away from the building stage, with no infrastructure for utilities or roads in place.

But D.R. Horton officially opened for business in the Pittsburgh region in July when it began purchasing and building on vacant “spot lots” in existing communities.

The first was Hidden Springs in Connoquenessing Borough, Butler County. Then came a dozen more “spot lots” in Winterwood, Butler, Butler County.

DR Horton Builders is making a move in the Western Pennsylvania market, in direct competition with Ryan Homes, the current number one builders in the area. Hidden Springs in Connoquenessing is one of DR Horton's newest neighborhoods, shown on Monday, Sept. 25, 2023.(Lucy Schaly/Post-Gazette)

“In the first year to two years, we are going to have to fill our pipeline with things that are readily available,” Ms. Lantz said. “That means land that has already gone through the development process, it’s fully entitled, we’re able to obtain building permits, and we can just start construction.”

Within the next six months, the company will open 50 to 55 townhouses in the McCandless Square community in McCandless, near Ashton Commons senior living facility; property at Highfields trail in Butler, Butler County; and its first larger-scale community — Millstone in Jefferson Hills.

Coincidentally, D.R. Horton recently took over work at another builder’s housing development in Houston, Washington County, that could be seen as a symbolic victory for the new builder in town: The Houston community D.R. Horton acquired is named Edward M. Ryan Estates — because it was built on land once owned by the founder of Ryan Homes.

‘Them coming to town is a big deal’

The building industry is waiting to see whether a big production builder like D.R. Horton can produce enough in Pittsburgh to make this market worthwhile.

“Those sized builders don’t typically come into a market unless they think they can build a thousand homes,” said Jeff Burd, owner of Tall Timber Group, a consulting firm for commercial and residential construction based in Ross. “We still don’t have the lot inventory to support much more than 20% more than the number of homes currently being built, which is around 2,000 to 2,500 — with townhouses, about 3,000.”

Jim Eichenlaub, executive director of the Builders Association of Metropolitan Pittsburgh, Downtown, said he is optimistic about Pittsburgh hitting the radar of national builders.

“It’s good for the region that national builders who had avoided this region in the past now believe Pittsburgh is a good market,” he said.

This is a dining/kitchen area in one of the duplexes in Hidden Springs in Connoquenessing, one of DR Horton’s newest neighborhoods, shown on Monday, Sept. 25, 2023.(Lucy Schaly/Post-Gazette)

Pittsburgh has its share of regional multistate builders, including Ryan Homes, Maronda Homes and Heartland Homes.

But D.R. Horton is an established national builder and the largest of its kind to come into this market.

“Ryan Homes has enjoyed an insane market share here that allows them to be the 800-pound gorilla. And they knew it,” Mr. Netzel at Keller Williams Realty said. “But D.R. Horton is the biggest builder in the U.S., and them coming to town is a big deal.”

Mr. Netzel said the most fundamental difference between Ryan Homes and D.R. Horton is that Ryan sells all of its homes by contract before being built. D.R. Horton, on the other hand, builds homes on spec, which means customers buy the finished product.

D.R. Horton believes its business model gives them a competitive edge.

“We select floor plans and options based on current design trends and start construction and offer homes for sale around the framing stage of construction. This way, buyers do not have to wait as long to move into their new home,” Ms. Lantz said. “It shortens the buying and moving timeline.”

Tim Grant: tgrant@post-gazette.com or 412-779-5834

First Published: October 2, 2023, 9:30 a.m.
Updated: October 2, 2023, 5:52 p.m.

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DR Horton Builders is making a move in the Western Pennsylvania market, in direct competition with Ryan Homes, the current number one builder in the area. Hidden Springs in Connoquenessing is one of DR Horton's newest neighborhoods, shown on Monday, Sept. 25, 2023.  (Lucy Schaly/Post-Gazette)
DR Horton Builders is making a move in the Western Pennsylvania market, in direct competition with Ryan Homes, the current number one builders in the area. Hidden Springs in Connoquenessing is one of DR Horton's newest neighborhoods, shown on Monday, Sept. 25, 2023.  (Lucy Schaly/Post-Gazette)
This is a living room area in one of the duplexes in Hidden Springs in Connoquenessing, one of DR Horton’s newest neighborhoods, shown on Monday, Sept. 25, 2023.  (Lucy Schaly/Post-Gazette)
This is a master bedroom in one of the duplexes in Hidden Springs in Connoquenessing, one of DR Horton’s newest neighborhoods, shown on Monday, Sept. 25, 2023.  (Lucy Schaly/Post-Gazette)
This is a dining/kitchen area in one of the duplexes in Hidden Springs in Connoquenessing, one of DR Horton’s newest neighborhoods, shown on Monday, Sept. 25, 2023.  (Lucy Schaly/Post-Gazette)
DR Horton Builders is making a move in the Western Pennsylvania market, in direct competition with Ryan Homes, the current number one builder in the area. Hidden Springs in Connoquenessing is one of DR Horton's newest neighborhoods, shown on Monday, Sept. 25, 2023. Pictured, are DR Horton Builders staff from left, Joe Lococo, construction manager, Jacquelyn Lantz, sales manager, Patricia Navickas, purchasing manager, Jennifer West, sales representative, and Shawn Falk, construction superintendent.  (Lucy Schaly/Post-Gazette)
#illustration #DRHorton  (Shutterstock, James Hilston/Post-Gazette)
Lucy Schaly/Post-Gazette
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