The warning signs began more than 10 years ago.

"The writing was on the wall at the 1992 National Home Builders Conference," recalls Lee Wetherington, president of Manatee County's Lee Wetherington Homes. And the message was crystal clear: "Get bigger, go small, or get out of business," says Wetherington.

It was at this conference that industry leadership predicted the future of home building would soon be in the hands of large national builders, and smaller local and regional builders would need to adjust to survive.

Over a decade later, this prediction has materialized.

Across the country, more and more large firms have merged, consuming land, resources and market share along the way.

The top 10 single-family builders now account for more than 20 percent of the market, reported National Association of Home Builders chief economist David F. Seiders in a 2004 housing update. "Large and very large companies continue to consolidate through mergers and acquisitions with little involvement of firms building fewer than 250 units per year."

Recently, in our own Sarasota-Manatee backyard, fueled by double-digit property appreciation and 1960s-level mortgage rates, a skyrocketing demand for single-family home construction has been accompanied by an increased presence of national builders with deep pockets and seemingly unlimited resources.

The growth in single-family home building rose to new heights last year, with most of the dirt moving on Manatee County lots along the east I-75 corridor and north of the Manatee River in Parrish.

In unincorporated Manatee County alone, 4,256 single-family building permits were issued in 2004, outpacing 2003 figures by 1,346, according to the Manatee County building department.

A number of national builders played leading roles in last year's blockbuster performance, often leaving local builders in the wings.

Some of them, such as US Home, Centex and DiVosta Homes, have been here for a while. Others, including Lennar Homes, Morrison Homes and Ryland Homes are relatively new to sun-baked Sarasota-Manatee, which has been recognized by Forbes.com as the 39th "Best Place to Live" out of 294 U.S. metro areas, by Money magazine as No. 7 in "Best Places to Live," and as one of the "Top 25 Terrific Places to Bring Up a Family" by Mothering magazine.

This growing presence of national builders is not unique to our area, says Tony Squitieri, division president at US Home in Sarasota. Nationals have been competing with local builders for market share and available land for several years now in larger Florida markets like Tampa, Miami and Orlando and elsewhere across the country, he says.

"National builders have the expertise and the shared resources necessary to build the master-planned communities that have become so desirable nationwide," Squitieri says.

Christina Phillips, spokesperson at Lennar's Miami headquarters, outlines the advantages: "Volume buying power, relationships with national business partners, well-tested floor plans in several markets and corporate support on advertising."

Most importantly, nationals have the edge when it comes to land acquisition, according to Jill Tunick, communications manager for the National Association of Builders business department. The best small-volume builders are savvy when it comes to buying land and lots, but few have the capital to grab up land like the big national companies. In a 2004 NAHB survey of nearly 300 single-family builders, this "monopolization" of land by big companies and the associated upward pressures on land prices proved to be the dominant concern. More than four-fifths of the respondents indicated that national builders with large land inventories make it difficult for small or medium-sized builders to get buildable lots. "The consolidation of larger builders, all owning at least a two-year supply of buildable land, can shut out the smaller regional companies," Tunick says.

At the 2004 International Builders Show seminar, entitled "Small-Volume Strategies for Tying Up Land and Lots," attendees-mostly small builders-learned how to control land without owning it and how to find the best parcels. They were advised not to go it alone, to consider a joint partnership with a land owner willing to wait for his money while the homes are built and sold and split the proceeds after the project is complete. Other advice included bidding only on the best parcels, and becoming very familiar with zoning in order to develop an effective site plan.

In the past, Wetherington says, developers of a new community would select several local builders who would commit to 15 to 20 homes a year for a four- or five-year period. "Now, nationals will commit to purchase 200 home sites at one time and build those 200 homes," he says.

Adding the national players to the mix has "raised the financial bar" locally, causing available land to increase in price, says Peter Mason, Bruce Williams Homes vice president of sales. "The pressure is on local builders to acquire land to compete with the nationals who come into the area with a pretty good war chest ready to pay higher prices for that land in order to acquire market share," he says.

Bruce Williams Homes, which delivers anywhere from 300 to 400 new homes annually, priced from $ 200,000 to $400,000, has kept its competitive edge primarily due to the foresight of its recently deceased founder Lloyd Williams, who set up a land development arm of the company early on, Mason says. "He was a visionary; he knew that in order to control our own destiny we needed to move to the area of land development. It's been the key to our success."

Through aggressive marketing, pitching his product to several area developers, Wetherington has continued to expand his business and increase his production over the last decade, introducing the Wetherington Signature Series in 2000, offering custom home designs to suit both his customers' home site and lifestyle needs as well as pulling over 385 building permits in 2004. Wetherington builds homes priced from $350,000 to more than $1 million in several Sarasota and Manatee county neighborhoods, including Greenbrook and The Country Club in Lakewood Ranch, The Founders Club and Tuscana in Sarasota, and River Wilderness in Parrish.

With more and more players in the game, mid-range companies, those building from 25 to 75 homes, are finding it tough to secure a position, says John Cannon, president of John Cannon Homes. "The key to the building game is land acquisition and that can be difficult for the mid-range builder," says Cannon, who builds more than 120 homes a year priced from $400,000 to over $1 million, with a focus on upscale communities such as The Founders Club, Palmer Ranch, and The Oaks in Sarasota, The Country Club in Lakewood Ranch, River Wilderness in Parrish and The Concession in east Manatee County.

Mark Cahill Homes builds in a number of local large-lot developments like Mill Creek, Country Creek and Panther Ridge in east Manatee and Foxbrook in Parrish as well as custom homes on the client's lot. Recently, Cahill has found it necessary to focus primarily on the latter due to lack of available land, according to Cahill's vice president of sales, Ken Berry.

Local builders do have some advantages though. According to Wetherington, quality levels can be an issue for production-oriented national builders. "Nationals with shareholders to answer to and a bottom line involved, get it built as efficiently as they can-locals build as best as they can," he says.

Mark Cahill Homes' Berry claims that on-site builder management, with the builder himself calling the shots and continuity of talented subcontractors, are the key advantages local builders have over their national competitors. "Many of our subs have been with us for over 15 years. They're part of the family," Berry says.

Bruce Williams Home's well-established subcontractor base often gives it an edge over the big guys, Mason agrees. "We've employed these people for a long time and will continue to employ them. We have a relationship established," he says.

Locals offer a more flexible approach to home building, contends Manatee County custom home builder Jeff Zoller, the exclusive builder for The Nursery, a 13-home site upscale community in northwest Bradenton. "The nationals' mindset tends to be production oriented," Zoller says. "Locals are better suited changes in design."

Wetherington adds that small builders are a better bet for their community because the local builder tends to be more involved. "The local builder is planted. His kids attend school and church here. The nationals don't do much of that; they typically move their executives around," he says.

Bambi Spahr, executive officer of the Manatee Home Builders Association, says that though she feels it's healthy to have all levels of builders as members in the association, national builders' involvement is often limited because their personnel often changes and they tend to live out of the area.

When all is considered, says Wetherington, local builders have more to offer than nationals. "National builders are good builders; locals are better," he says.

ROLL CALL

A guide to the national builders, old and new, who've entered the local market.

Miami-based US Home, which was purchased by Lennar Homes nearly five years ago, has built more than 300,000 residences in some 15 states since 1954. Local US Home developments include the River Place and gargantuan 2,500-acre Heritage Harbour communities in Manatee County.

Centex Homes, established in 1950 in Dallas, Texas, began building homes in the Tampa area in the late 1970s. In 2000, the Tampa and Sarasota divisions combined to create the West Florida Division. It is currently building single-family homes, townhomes and villas in 10 communities in four counties. Local Centex-built neighborhoods include Barrington Ridge in Bradenton, the Enclave and Parkridge communities in Sarasota, and Venetian Falls in Venice.

Di Vosta Homes, which builds in Village Walk of Sarasota on Palmer Ranch, is a division of Michigan-based Pulte Homes, with operations in 44 markets across the United States.

Lennar Homes, a $9-billion national company building in 19 states, has been building in the Sarasota-Manatee market for more than eight years in several communities including Mote Ranch in Sarasota, and River Place and Heritage Harbour in Manatee County.

Georgia-based Morrison Homes operates in 11 states and focuses solely on the development of single-family homes and townhomes, located both in stand-alone subdivisions and as part of larger, master-planned communities. With nearly 4,000 home sales annually, Morrison Homes ranks as one of the top 25 homebuilders in the United States. Local Morrison developments include Aberdeen in Parrish, Oakley Place in Ellenton, Greenbrook Valley in Lakewood Ranch and Mote Ranch in Sarasota.

Ryland Homes headquartered in California, has built more than 220,000 homes since 1967, operating from coast to coast in 27 cities. Local Ryland neighborhoods include Mandalay in Bradenton and Oak Leaf Hammock and River Plantation in Ellenton.