Land Subdivision
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 4,600 land subdivision firms in the US purchase and prepare property for division into multiple lots and subsequent sale to builders for residential, commercial, or industrial use. They typically develop property that they own, but may also subdivide and prepare sites for other property owners. About 66% of land subdivision firms have no employees. They rely on subcontractors to perform all services in preparing land for development.
Complying with Government Regulation
Land subdivision firms must comply with a wide range of federal, state, and local regulations governing land development.
Local Opposition To Development
Concerns over rampant growth or changes to existing neighborhoods can lead to opposition to new land subdivision projects.
Industry size & Structure
The average land subdivision firm with employees has about 8 workers and generates about $2 million in annual revenue.
- The land subdivision industry consists of 4,600 firms with 38,500 employees and generate about $10.7 billion annually.
- The average single operator (non-employer) firm generates $176,000 in annual revenue.
- Single operator firms rely on subcontractors to perform all services in preparing land for development.
- About 79% of firms with employees have less than 5 employees. Only about 74 firms have over 100 employees.
- The largest states for land subdivision are Texas, California, and Florida.
Industry Forecast
Land Subdivision Industry Growth
Recent Developments
Jul 10, 2024 - Stronger Industry Growth in 2025
- The land subdivision industry is expected to return to stronger sales growth in 2025 after a weak housing market hurt demand in 2023 and 2024. The industry’s year-over-year sales declined 2.4% in 2023 and is projected to further slow to just under 2% in 2024, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth in the land subdivision industry is expected to increase to 6.45% in 2025, then grow by an average annual rate of about 6.3% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
- A trend in smaller lot sizes for single-family detached homes has accelerated in recent years, according to the latest Survey of Construction by the US Census Bureau. Even as more families decamped to suburban areas seeking more space during the pandemic, lot sizes have continued to shrink. In 2023, lot sizes of less than 0.16 acres (less than 7,000 square feet) accounted for 40% of new single-family home sales compared to 30% in 2011. The share of lots under 0.16 acres has risen two percentage points since the pandemic began. Shrinking lot sizes suggest that firms that build homes speculatively have reduced lot and home sizes to cope with lot shortages and to offer more affordable homes as housing costs have risen.
- Low- to medium-density multifamily building construction has grown to account for a larger share of the overall multifamily market in recent years, according to National Association of Home Builders Analysis of US Census Bureau data. In 2024, there were 450,000 multifamily housing unit completions, marking the highest level in 37 years. Of those, 216,000 were buildings with fewer than 50 units, which was the largest share for low- to medium-density buildings since 2006.
- Demand for building design services slipped in May from the prior month, as architectural billings remain soft, according to a June report by the American Institute of Architects (AIA). The AIA’s Architecture Billing Index (ABI) fell to 42.4 in May from April’s reading of 48.3. Any reading of 50 or more indicates growth in architectural billings. The score for new project inquiries fell to 52.1 in May compared to 54.8 in April, and the index for the value of new design contracts decreased from 49.2 to 45.6. The AIA’s Chief Economist, Kermit Baker said, "The decline in the May ABI score continues a year and a half of weakness in design billings at US architecture firms. However, firms only reported modest declines over the first half of this period. Over the past nine months, volatility has increased, and scores have softened more significantly, with the May score the weakest reported since the end of the pandemic recession."
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