The nation's ten largest home building companies will be erecting four out of every ten new houses by the end of the decade, the president of Beazer Homes predicted at a conference last week.

If Ian McCarthy is correct, the top 10, which doubled their market share over the last 5 years, jumping from about 11 percent of all sales in 1997 to 23 percent in 2003, will all but double it again by 2010.

While some of the gain will be accomplished through mergers and acquisitions, McCarthy said, most of it will come about because large, public builders like the Atlanta-based Beazer have sustainable, competitive advantages that their local and regional competitors can't match.

Companies like Beazer, the nation's sixth largest builder with nearly 15,500 sales last year resulting in net revenues of $3.2 billion and net income of $173 million, have the edge in nearly every facet of the business, from assembling great amounts of land to integrating superior internal technology, McCarthy told the Midwinter Housing Conference in Park City, Utah.

Beazer, which is now active in 19 states, has boosted its land holdings significantly in the last 10 years.

In 1994, the company, then the 12th largest in the country in terms of sales, controlled almost 11,000 lots, either as the direct owner or through options. That was enough to last nearly three years.

But by the end of 2003, it had nearly 80,000 lots at its disposal, more than sufficient to keep the home building operation humming for a good five years at its current sales pace.

And Beazer is not alone, according to a recent study by Credit Suisse First Boston, which found that the nation's 13 largest building firms increased their investments in land by 22 percent between 2002 and 2003 and will boost their land holdings by 15 percent more this year.

"All of us are building (landing inventories) for the future," McCarthy said. "We're all taking large positions in land."

The Beazer executive said his company's ability to raise money in the capital markets more than offsets the extra carrying costs it incurs by having a huge bank of land on its books.

"It's not a question of whether we are paying more," he said. "Smaller builders can only obtain one-year financing. We can raise 10-year money to make a three-year commitment."

And it often takes that long to get all the government approvals needed to develop ground, put in the infrastructure and start construction, he pointed out. In Gwinette County near Atlanta, he said, "it now takes a year just to get on the agenda."

Not everyone agrees that big builders will become so dominate so quickly.

Kent Colton, the former executive director of the National Association of Home Builders who is now a senior scholar at Harvard's Joint Center for Housing Studies, is one who thinks their growth "won't be as dramatic."

It's not that he doesn't believe public companies will reach a 40 percent market share. They probably will, Colton told the conference. But it will be a "slower transition" that will take something like 20 years, not just 5, if only because many markets are too small to support major companies.

But McCarthy said the difficulties builders are experiencing in gaining zoning and other approvals has been the catalyst for an unprecedented wave of consolidation in the housing sector. And he predicted that consolidation will continue, "giving further advantage to public builders at the expense of private builders."

No other industry in history has consolidated during a strong period of growth like housing has in the last few years, he pointed out.

"It happens in bad times, not good times. And if interest rates go up, consolidation will occur even faster."

Besides the capacity of large builders to raise capital and acquire and hold land, Beazer's ability to purchase great volumes of building materials directly from manufacturers gives the company another distinct advantage over its smaller competitors.

"Everyone's coming to us directly. So we don't have to go through the traditional distribution system," McCarthy said.

The company also enjoys a decided edge in technology, according to its president, who said he has the ability, via either his laptop or PDA, to know the cost of each and every Beazer house under construction and how long it will take to be delivered to the purchaser.