Taylor Morrison: hot property - FT.com The US housing market is just plain hot. Average home prices rose 8 per cent in the 12 months to the end of January, according to S&P/Case-Shiller's 20-city composite, the biggest year-on-year increase since 2006 - before the housing bubble burst. In February building permits for single-family homes were at a seasonally adjusted annual rate of 600,000, the highest since the eve of the financial crisis in June of 2008, Census Bureau data show. Housebuilders have been big beneficiaries: the S&P 500 Homebuilding Index rose 100 per cent last year and is up a further 14 per cent in the first quarter. Now what? The largest housebuilder IPO in more than two decades, naturally. Taylor Morrison Home Corp plans to go public, and hopes to raise $500m or more. It would be the largest such IPO since at least 1993, according to Dealogic. Taylor Morrison builds houses in the US and Canada, including states hard hit by the housing bust such as Arizona, Florida and California. In 2012 Taylor Morrison completed and sold 4,014 homes, nearly three-quarters in the US, with an average price of $364,000. In the same period net profit was $431m on $1.4bn of revenues. More than half of the IPO proceeds will repay existing holders. TPG and Oaktree Capital backed a company that bought Taylor Morrison from Taylor Wimpey for about $1bn two years ago. The proposed midpoint price of $21 values Taylor Morrison at $2.6bn. IPO investors will own about 20 per cent. The IPO values Taylor Morrison at 1.8 to 1.9 times its book value. That compares favourably with Lennar, PulteGroup, DR Horton and other housebuilders, which trade at more than two times book value - near or above their pre-crisis highs. Investors may get a slight discount but, should the housing market cool, nothing like a bargain.