Price does not affect profit: study of Lee Evans Group clients shows no correlation between product price and builder profitability. It's management that matters.(BOTTOM LINE BUILDING)

Professional Builder (1993), December, 2004 by Shinn, Chuck

When we dig into the data from our most recent Builder Financial Study (the 11th consecutive survey of Lee Evans Group clients), we find house prices in 2003 ranging from $98,800 to $3.2 million, but no direct correlation of price and profitability.

Thirty-eight percent of the builders had average sales prices under $200,000, 29.8 percent fell between $200,000 and $299,999, 16 percent had average prices in the $300,000 to 399,999 range, 7.4% from $400,000 to $499,999, and 8.5 percent averaged over $500,000. We arrayed the builders from the lowest to the highest average sales price, then divided them into quartiles for analysis. (Keep in mind, these 94 builders can't be called "average."

First, we compared each quartile's average sale price to the...

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