Small Builders Dominate Little Rock's Market

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Only one contractor built more houses in Little Rock last year than Sweet Dreams Homebuilders, the business brothers Charles and Eddie Tatum started by the seat of their pants back in 2001.

“We can get nice houses up,” Charles Tatum said last week, “but the whole business part has been a tough school of hard knocks with a high tuition.”

The Tatum brothers, who also employ other members of their extended family, pulled permits for 23 new houses in Little Rock during 2006, according to city permit records.

That number put them in a tie for second place on Arkansas Business’ first list of residential contractors, which is ranked by the number of houses built in the city limits last year.

No. 1 is Taypac Homes LLC of Little Rock, the partnership of Jim Pace and Buddy Taylor that built 25 houses last year. Tied with Sweet Dreams at No. 2 is G&S Builders of Little Rock.

While the list ranks only those houses built in the capital city, it vividly illustrates the fragmented nature of the homebuilding industry in Arkansas. Even the most active builders are invariably small companies; most build in particular neighborhoods and specialize in houses at a certain price point. And many are so low-profile that they aren’t even listed in the business section of the phone directory.

The big, publicly traded homebuilding giants — Toll Brothers Inc. of Horsham, Pa., KB Home of Los Angeles, D.R. Horton Inc. of Fort Worth, Texas, Centex Corp. of Dallas, Lennar Corp. of Miami, Pulte Homes Inc. of Bloomfield Hills, Mich., and Ryland Group Inc. of Calabasas, Calif. — simply do not work in Arkansas. And that leaves the residential contracting business wide open to mom-and-pops, many of which will build one to four houses in a year.

“The demand and the population is not there to justify it” for the big corporate builders, said Bill Greenwood, who founded G&S Builders in 1980.

Charles Tatum, who also owns and operates the Cash & Carry Market in the Red Oak community south of Sweet Home in Pulaski County, said he and his brother acted as contractor on four houses the first year they were in business. That’s when they learned the most painful lesson, he said: No more spec houses. The houses they built last year were in the Oxford Valley subdivision in southwest Little Rock near Mabelvale.
Sweet Dreams’ homes had an average permit value of $104,013, the lowest on the list, and ranged from $80,800 to $160,000. The permit value doesn’t include the value of the lot or improvements to the lot.

The average permit value of the homes Taypac built last year was $256,460, but that included permits ranging in value from $175,000 to $375,000. Pace said he and Buddy Taylor, who formerly built homes in the Cabot area under the Budco name, formed Taypac two-and-a-half years ago.

The 23 homes built by G&S averaged $110,383. Most of its houses were in the Greenwood Acres subdivision that Bill Greenwood and his sons developed near the intersection of Stagecoach Road and Herndon Road in southwest Little Rock.

G&S used to build much more expensive houses, Greenwood said last week, but at the request of city officials he began building smaller spec houses for first-time buyers. It has been “very rewarding to me to give people a house that never dreamed they’d have a house,” he said.

Seventeen of the 27 residential contractors on the list, including five that tied for No. 23 with six permits each, pulled permits averaging less than $200,000. The highest average value among the prolific builders was $571,429 by Kevin Hannah Construction. Four of Hannah’s seven permits also show up on this week’s list of the largest building permits issued in Little Rock last year, meaning they were valued at $600,000 or more.