SWOT Analysis of Pulte Group

Pulte group is a USA based real estate property developer. The company undertakes construction and design of semi-custom homes, single family detached homes, senior housing facilities, duplexes townhouses and condominiums. Pulte group develops these homes for both individual customers and corporate clients. Home building is company’s core business. Pulte group also involves in acquisition and development of land site within United States primarily for residential purpose and construction of housing. Pulte group also provide financial assistance and home mortgage services to its clients. It’s headquarter is in Bloomfield, Michigan. Company along its subsidiaries operates in 29 states of US.

Strengths

Pulte group operates with 1 parent 2 subsidiaries which are its core strength. Both subsidiaries are related diversified and provide a major support to the business. This group is also a techno friendly. Recently, Del Webb one of its subsidiaries included solar and energy efficient features at its new sun city homes in Arizona. Pulte group’s sustainable acts include finding energy efficient homes, Solar panel and few other actions are keeping its stakeholders satisfied. Pulte group also has a unique team of its designers and engineers, who make things, happen. In its third quarter of 2012, new orders for homes increased by 27% which is a major sign of growth.

Weaknesses

Pulte group is under a high leverage and debt crises. There is also an uncertainty in company’s performance observed.  Group is still struggling to overcome the property depression loss of 05-08 and trying to achieve its objective. Pulte group also has weak financial management policies and failed to diversify and maintaining a risk managed portfolio, despite of knowing real estate market uncertainties.  Entity failed to hedge or find alternative material for Lumber, which is a key material and labeled with increasing prices daily.

Opportunities

Housing industry is again flashing the strongest signals yet of a sustainable rebound. Buyers are wadding towards investments, recorded low mortgages and rising employment is also a key indicator for growth.An economist at ABN Amro Group Economics in Amsterdam observes that there are definitely green shoots in the real estate market. In spite of heavy depression years back, group is maintaining its financial performance for housing operations which resulted in improved SG&A leverage as overhead expenses fell 80 basis points to 10.2% of home sale revenues. Pulte group operates in 60 states of US, it has a capable team to manage overseas investments and have a good overseas opportunity where housing market is less depressed then US. There is 20% industry growth observed in increase in housing starts with 122% improvement in the homebuilder confidence index observes, by Bloomberg, which is a key indicator of growth

Threats

There are still micro effects of property depression and recession of 2008 on real estate sector of United States. Government is also keeping a high eye through regulators on house building sector to avoid any other depression. Mortgages are also limited for house building. Increasing rates of lumber and other key materials is also a key threat for industry and Pulte group.

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