Home buyers may benefit from merger

      Consumers looking to buy a new home could be the winners in last week's merger of Kaufman and Broad Home Corp. and Lewis Homes, while smaller home-building firms may face new challenges.
      "By combining our companies resources, and with Lewis being the No. 1 home builder in Southern Nevada -- we were headed to be third or fourth -- our purchasing power with contractors becomes greater and we can transfer that savings on to the buyers," said Jay Moss, president of Kaufman and Broad of Nevada. "If our costs are less, we want the consumer to benefit from our ability to contract for better pricing."
      If so, competition may tighten for small builders, according to Bruce Karatz, chairman and chief executive officer of Los Angeles-based Kaufman and Broad.
      "As you gain size in a disciplined way, you're able to get competitive advantages of lower costs, more efficient delivery systems and a dominating presence that ought to make it more difficult for smaller builders," Karatz said. "There will always be smaller builders, but they'll have a tougher time competing."
      Ron Rulof, vice president and director of sales and marketing at Lewis Homes of Nevada, agrees.
      "Some small builders have their own niches," Rulof said. "If they operate efficiently, and are unique in the way they present their products, then there's room in the market for them."
      The agreement last week created the largest home builder in the United States. Lewis sold 1,520 homes in Southern Nevada last year; Kaufman and Broad closed 563 sales, seventh on Home Builders Research list of the Top 10 Builders.
      There are no plans for changes in management at either company.
      Robert Lewis, president of the Lewis Homes group of companies, has committed to remain in his position for at least two more years, according to Rulof, who said Lewis met Tuesday with the company's more than 200 local employees.
      "He told them that it's still the same team building the same quality homes; it was a comfort zone for them," Rulof said. "We've all been together for a long time."
      Nationally, Kaufman and Broad ranked No. 4 on the 1997 Builder 100 list with 11,443 sales and gross revenue of $1.9 billion, while Lewis Homes ranked No. 21 with 3,290 closings and $732 million in gross revenue.