2012 Top-Selling Master-Planned Communities

The national housing market is clearly showing signs of recovery and nowhere is the improvement more evident than in the performance of the nation’s largest master-planned communities. John Burns Real Estate Consulting surveyed nearly 100 large-scale residential communities across the United States to compile our list of the 50 best-selling communities for 2012. Our consulting team has consulted on or visited the vast majority of these communities.

The following ranking represents the top 50 master-planned communities in the country based on net sales. Together, these communities totaled 22,806 new home sales in 2012, which is a 46% increase over the 15,599 new home sales in these communities in 2011.

Sales improved year-over-year at 48 of the 50 top master planned communities. Virtually every master planned community in this year’s survey experienced more sales in 2012 than in 2011. In fact, sales at 11 master-planned communities increased more than 100%, and The Bridges and Hastings Farms communities jumped to 240+ sales in their first year open. Two communities still made the top 50 with lower 2012 sales; Monterra has closed out and Telfair is in its’ final phases.

Villages of Lake Sumter retains top sales rank; Irvine Ranch has a bigger increase. The Villages’ 2,851 net sales during 2012 are roughly double the sales of the 2nd highest selling community, Irvine Ranch. Mollie Carmichael, Principal Consultant and leader of the company’s in-house consumer research program, notes “The success at The Villages is easily understood after conducting focus groups onsite this year. This master plan developer has taken master plan design to an entirely new level. A few attractions worth mentioning include daily live music throughout the community, great restaurants, constant opportunities to meet people through events, and people that are truly smiling everywhere you look.”

However, the Irvine Ranch master-plan in Orange County had a whopping 88% increase with 1,431 net sales during 2012, which moved this community to #2 from #4 last year. Nicole Murray, Consulting Vice President and an experienced housing executive, says “The Irvine Ranch continues to be a desired location by buyers in Orange County and abroad. Its exceptional school system, well-executed amenities, and strong job base makes it a premier area of Orange County. Specifically, the schools attract local and international buyers, which have been awarded California Distinguished School 48 times since 1986 and Blue Ribbon 13 times since 1983.”

Master-plans in Texas and Florida dominate. Fifteen of the top-selling master-planned communities in the country are in Texas, and 12 of those are in the Houston metro area. Ken Perlman, Senior Vice President and our frequent flyer to Texas, adds “Our recent work in Houston indicates substantially improving market conditions, with builders selling homes just as fast as developers can deliver lots.”Our monthly builder survey confirms that net prices are rising steadily in Houston.

Sales remained very strong in Florida master-plans, despite lagging job growth in several metros. Nine of the 50 top-selling master-planned communities are in the state of Florida. Lesley Deutch, the company’s Senior Vice President and busy Florida-based consultant, notes “The Lake Nona master-plan is benefiting immensely from job creation in the submarket; the cluster of medical-related facilities, proximity to the airport, and proximity to other major employment centers have driven strong demand and price appreciation over the last year. Lakewood Ranch also had a stellar year as the master-plan attracted both retirees and families with its varied product offerings and strong amenity base. Additionally, Lakewood Ranch is benefiting from a strong economic base, which continues to attract new residents to the project.”

Rosedale in Azusa saw the biggest sales increase. The master-planned community with the biggest percentage sales increase is Rosedale in Azusa, with a 204% increase to 271 sales from 89 in 2011. Pete Reeb, Senior Vice President and long-time Southern California consultant, adds “Rosedale is a great example of a community where product segmentation, community design, and superior execution come together to create a master-plan that generates excitement in the market. Incorporating a thoughtfully considered “resort” community recreation center, 10 parks, natural open space, and a future Metro Gold Line rail station, Rosedale has emerged as the place to be in the San Gabriel Valley.”

Six master-plans moved into our top 25 group. Shea Homes’ Mountain House in Tracy, Fulton Homes’ Ironwood Crossing in Phoenix and Johnson Development’s Woodforest in Houston are new to this year’s list of top 50 communities. Summerlin in Las Vegas, Lake Nona in Orlando and FishHawk Ranch in Tampa were all in the 26-50 group last year. We revised our methodology for counting Otay Ranch, pushing it into the top 10.

Dean Wehrli, our consulting Vice President based in Northern California, notes “Mountain House was able to gradually squeeze out most of its high level of distressed properties and maintain a very attractive feel. It enjoys tremendous Bay Area demand given its location right across the border from Alameda County, with most of that demand from the jobs powerhouse of the Silicon Valley. Positanohas done well from the start. Dublin has evolved into the hottest new home node in the East Bay, with improving and now excellent schools, a maturing retail environment, and more limited competition in the surrounding communities like Pleasanton and San Ramon.”

Based in San Diego, Pete Reeb adds “Since its inception well over a decade ago, Otay Ranch has perennially been one of the top-selling master-plans, not only in San Diego County but in all of Southern California. With three concurrent large-scale “villages” underway – Montecito Village, McMillin Lomas Verdes, and Winding Walk (each typically with anywhere from four to eight actively selling neighborhoods) – Otay Ranch is able to offer a broad spectrum of residential products appealing to a wide array of prospective buyers with close proximity to jobs, public transit, public and private schools, and shopping.”

Nine developers had more than one master-plan in the top 50. Newland Communities has seven master-plans in the top 50 that combined for 2,615 new homes sales in 2012, up 15.5% YOY. Johnson Development captured 1,601 sales in four different top 50 master-plans, all in Houston, for a 69% increase from 2011. Shea Homes has three top sellers: Highlands Ranch in Denver, Mountain House in Tracy, Vistancia in Phoenix with Sunbelt, totaling 1,132 sales in 2012 for a 105% increase. Six developers have two communities each in the top 50: Focus Property Group, Howard Hughes Corporation, DMB, Fulton Homes, Starwood Capital/Land and GL Homes.

Consumers want amenities that most master-planned communities have. In our proprietary survey of over 20,000 consumers nationally, prospects indicate they are looking for amenities such as a pool (44%), a clubhouse (58%), a community recreation center (51%) and water or lake amenity (40%), beyond a good location and nice looking neighborhood. Nationally, only 18% are looking for a golf course in their next community. Most master-planned communities offer these appealing, shared amenities in addition to range of home sizes and prices.

Strong sales are supporting price increases. Finally, Jody Kahn, our Senior Vice President and manager of the study, adds “It was gratifying to see the strong sales improvements at nearly all of the master-planned communities we considered for this year’s ranking. In addition, net prices are increasing in most of these desirable locations, and in some cases builders were intentionally limiting sales in the 2nd half of the year while pursuing better margins.”