With market consolidation accelerating in the home building sector, smaller, regional private builders are having to be more nimble, innovative, and efficient to compete against their ever-growing public peers. In 1990, public builders accounted for roughly 10% of the market; this share is now more than 50%. The top ten builders on the Builder 100—all public companies—account for 45% of the new-home market and 75% of the closings in the top 50 markets.
Against this backdrop, top executives from private builders Estridge Homes, Red Cedar Homes, and Grand Oak Builders joined moderator Michael Berke of Tempo Capital Group at the 2026 International Builders Show (IBS) in Orlando to discuss the strategies and tools to compete against larger, public peers. The session, “Private Builder Playbook: Proven Strategies to Win in a Big Builder World,” touched on product differentiation, right-sized sales strategies, and how to capitalize on local market expertise.
“The first ingredient in competing in a big builder world is running a tight ship,” Dave Erickson, CEO of Columbus, Georgia-based Grand Oak Builders, shared with attendees. “If you are not making healthy profit margins or above average profit margins, you are going to have a hard time going toe-to-toe with somebody who has way more capital than you.”
Erikson cautioned that the strongest performing private builders cannot afford to be “lazy builders” and instead must be looking for continuous improvement on a near-daily basis.
“If you are not out there every day looking for little things [to get better], you are not going to get there,” he continued. “If you are not at a 7% net margin—the industry average—you need to be digging hard. The difference between a 7% and 12% net margin is not just one or two different things, it’s 50 different things. You are looking for waste, ways to tighten your cycle time, or for tight estimating budgets up front.”
Product Differentiation and Being Friendly to Change
Clint Mitchell, CEO of Indianapolis-based Estridge Homes, discussed how his company’s strategic approach and product segment help the company compete against public builders in Estridge Homes’ home market. The builder’s average price point, $800,000, is a differentiator and Estridge Homes operates almost solely in self-developed master plans.
“We focus first on lifestyle and communities. We focus on great architecture, thinking about the streetscaping and landscaping. We are architecture heavy on the home side and amenity heavy on the master plan side,” Mitchell said. “If has pushed us further away from the publics. They do what they do really well, and we don’t want to try and compete with that.”
Jon Grabowski, CEO of Charlotte, North Carolina-based Red Cedar Homes, also highlighted how the company’s focus on product differentiation helps in a public-heavy, high-volume market. Red Cedar Homes, however, is competing sometimes directly in the entry-level price segment.
“We spent a lot of time vertically integrating ourselves, through cabinetry, countertops, solid surfaces, or options. Not as a custom builder, but being friendly on options and giving choices,” Grabowski said. “Doing things that the public builders have taken out of their business to find more value and efficiency. If we are within $25,000 more than the publics, it is the same buyer pool in our market.”
Grabowski also highlighted how the company is able to compete even with a fraction of the marketing budget as the larger companies in the Charlotte market.
“We let the nationals drive the traffic. If they are driving traffic to a site across the street, we can pick up the same traffic after they drive through,” he said. “Our marketing budget is one-twentieth of what are national competitors are putting out there. But we are letting them drive the traffic, and we are taking whoever wants to value our product a little bit more.”
Price Cuts and Incentives
While larger companies have been able to absorb price cuts and heavy financing incentives in the more challenging current demand environment, smaller companies have had to be more strategic about what they can offer prospective buyers. Grabowski said Red Cedar Homes found that its buyers valued closing cost assistance more than mortgage rate buydowns.
“We had to learn how to react without just slashing prices, because we couldn’t afford to,” Grabowski said. “For a three-month period, we saw that 85% of our buyers were selecting closing costs or other discounts, not interest rate buydowns. It helped us from a brand standpoint. We created enough incentive that we were still capturing traffic, creating value, and not giving it away.”
Erickson cautioned that an approach that works in one market, though, may not work in all markets.
“It is not a one-trick show; it comes down to what you do,” Erickson said. “If you’ve got the margin, you can cut prices a little bit. If you [feel you] have a better product, maybe you don’t have to. You just need to make sure people know that you have a better product.”
Finding Efficiencies
Mitchell, Erickson, and Grabowski all stressed the importance of finding efficiencies to streamline operations through either technological innovations or more informed land strategies. From understanding the cadence of project deliveries in a given market to avoid overcrowding or oversaturating a market to maximizing productivity from smaller staffs, the panelists shared real-world examples of being able to do more with less.
“When you think about margins and cost, it’s not just the cost of the home or what you can strip out of the home,” Grabowski said. “It’s what you can do from an operations and overhead perspective. Being lean and mean as a private builder is a good thing. Anywhere we can create more bandwidth with our employees without having to add more bodies and more cost, it just feeds to a greater margin, and you don’t have to charge as much for your homes.”
