Master-Planned Communities

Texas and Florida Snag 70% of Top 50 Master Plans; Southwest Cools

Avery Blackman
Jody Kahn
Dillan Krieg photo

Avery Blackman

Jody Kahn

Dillan Krieg

February 2, 2024

In 2023, the Top 50 Master-Planned Communities (MPCs) enjoyed strong new home sales despite elevated interest rates and economic uncertainty. Florida continues to lead the regions with 40% of the combined new home sales in the top 50 master plans. Texas follows with 34% of combined sales, equating to a 10-percentage point jump from 2022. Southwest MPCs captured 12% of sales, flat from 2022, and Southern California MPCs took 6%.

The number of Southwest master plans in our top 50 list has declined since 2019, while Florida and Texas have gained traction.

  • Florida claims 14 places on our top 50 list (spread across 12 metros), including 5 of the top 10 master plans.
  • 20 Texas master plans landed in the top 50, including 2 Houston master plans in the top 10.
  • 7 Southwest master plans ranked in the top 50, including 2 in the top 10, both in Las Vegas.

Three big trends are contributing to the regional shifts in the top 50 master plans:

  • Stretched affordability
  • Differing new home sales recovery from the 2022 decline
  • Master plans building to completion or running low on lots

Stretched affordability 

Measured by housing-cost-to-income ratios, affordability has weakened in many Sunbelt markets since 2019, when a pre-Covid immigration wave was underway. Many Sunbelt metros are absorbing consecutive years of strong in-migration, slanted toward wealthier households bringing equity from more expensive markets. Supply bottlenecks limited the expansion of new home supply during the pandemic, and fewer resale sellers listed their homes.

The mismatched demand and supply fundamentals produced tremendous new home price appreciation. Home prices appreciated 20% year over year (YOY) nationally in the spring of 2022 per our monthly builder surveys. The regions with the highest new home price appreciation rates at the April 2022 peak include:

  • Florida at 28% YOY
  • Texas at 28% YOY
  • Southwest at 22% YOY

 

Rapid mortgage rate increases in 2022 and the first half of 2023 drove monthly mortgage payments even higher, worsening affordability and stalling new home sales. Major Southwest metros have been hit hard, with residents spending over 40% of their household income on housing, as shown in the table below. Historically, the Southwest metros have benefitted from affordability and Pacific coast proximity, attracting both primary and second-home buyers. 

Differing sales recoveries

New home market conditions varied significantly by region in 2023, impacting new home sales in master plans. As mortgage rates spiked in late 2022, many home builders saw sales slump and prices weaken. Even as rates peaked at 8% in October 2023, the regions were experiencing markedly different sales recoveries.

  • Florida’s sales rates declined modestly and recovered quickly, aided by strong domestic and international in-migration. Desirable and well-segmented master-planned communities mostly saw solid sales and rising prices in 2023.
  • Texas’ new home market recovery was bifurcated between the slower Austin and San Antonio markets and the stronger Dallas-Fort Worth and Houston markets.
    • Austin: Poor affordability and tech layoffs contributed to weak new home sales that approached normal levels at year-end 2023, supported by builders’ price reductions. Pricing is still stabilizing.
    • Houston and Dallas-Fort Worth: Strong job creation, company relocations, and builders’ incentives supported improving sales rates and flat to rising new home prices.
  • Southwest builders struggle with a slower recovery. Affordability concerns and slowing migration trends challenged builders (particularly in Phoenix and Salt Lake City) to find the market pricing that finally boosted new home sales rates into a normal range by year-end 2023. Pricing is still stabilizing.
    • Las Vegas builders experienced an earlier recovery than those in other Southwest markets, driving sales in some top 50 master plans.

Shrinking lot availability

Several long-term top 50 master plans dropped in our ranking or out of the top 50 altogether. Our consultants confirm that many of these master plans have built out or are close to running out of lots to support new home sales.

Seven Phoenix master plans made our top 50 list in 2019 compared to only Bella Vista Farms (#38) in 2023.

  • Consultants Ken Perlman and Barry Cox confirm that many popular Phoenix master plans sold out, have limited lot inventory, or are nearing completion following robust new home sales from 2020 through 2023, including Eastmark, Cadence at Gateway, Verrado, Marley Park, Meridian, and Vistancia.
  • Eastmark and Verrado both sold over 330 new homes in 2023 but fell short of the top 50 sales threshold. Our consultants anticipate new sections opening in Vistancia and Verrado at higher price points, which could moderate future sales rates.

 

Sterling Ranch (#39) and Parkdale (#48) in Denver ranked among the 2023 top 50.

  • Consultant Chelsea Scott notes that Sterling Ranch is flourishing as new home buyers continue to favor Denver’s south side, with its good schools, access to Route 85 North to the Tech Center and downtown, and nearby jobs at Lockheed Martin.
  • Parkdale on Denver’s north side offers relatively affordable new homes and desirable Boulder schools, plus extensive trails and open space.
  • Prior top 50 master plans have built out or have limited supply ahead, including Highlands Ranch, The Meadows, Raindance, and Central Park (formerly Stapleton).

 

Several large Florida master plans reported fewer new home sales in 2023, as elevated new home prices deter local buyers (though appeal to well-off new arrivals).

  • Nocatee (#23) is the top choice for many buyers relocating to Jacksonville, with its broad array of homes, appealing amenities, good schools, and a short drive to the beaches.
  • Sales at the Lake Nona master plan declined slightly in 2023 due to low lot availability, falling short of the top 50 threshold. Senior consultant Lesley Deutch shares that this premiere Orlando master plan continues to attract residents and businesses by offering an appealing lifestyle with expanding amenities and public art spaces.

2024 challenges and opportunities 

Challenges: In 2024, housing affordability, land availability and pricing, and rising construction costs will challenge home builders and developers. Builders benefitted from a lack of competition from resale supply in 2023. Declining mortgage rates may encourage more sellers to list their homes. Lot and land prices have been rising since 4Q22, which contributes to higher new home prices.

Opportunities: The John Burns team is forecasting increased new home sales and rising price appreciation nationally in 2024. Declining mortgage rates drove an atypical December 2023 jump in new home traffic and sales, and builders are preparing for a strong 2024. Many plan to open new communities, which they expect to drive solid sales. Builders who control finished lots in desirable master plans could hold an advantage as buyers value a sense of community, good schools, and amenities when choosing their new homes and neighborhoods.

Contact us for support and information.

Our experienced consulting team helps developers maximize sales by segmenting master-planned communities by life stage, price range, and lot size while helping to shape community identity. Our team is helping developers tackle affordability challenges in new ways, from unique product offerings to identifying which amenities residents value the most.

 

For more information on the master-plan ranking, metro and regional new home sales and pricing trends, and our residential land, builder, single-family rental operator, resale agent, and fix and flip surveys, please contact Jody Kahn, Avery Blackman, or Dillan Krieg.

 

For information on our 2024 New Home Trends Summit or to subscribe to our New Home Trends Institute, please contact us

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About The Author

Avery Blackman
Avery Blackman
Research Analyst II, Surveys
Avery supports JBREC’s monthly and quarterly report updates, as well as a few JBREC surveys. She analyzes our proprietary surveys, including Real Estate Agent Survey, Land Survey, Fix-and-Flip Survey, Builder Survey, and the Single-Family Rental Survey.
Jody Kahn
Jody Kahn
Senior Vice President of Research Surveys
Jody delivers timely and accurate insights on housing market trends at the metro, regional, and national levels. She combines statistics and commentary from JBREC’s independent surveys with data trends, forecasts, proprietary indices, feedback from consultants, and decades of housing experience to give clients insights that support business decisions.
Dillan Krieg photo
Dillan Krieg
Research Analyst I, Surveys
Dillan produces and analyzes our for-sale survey reports, including our Builder Survey, Real Estate Agent Survey, Land Survey, and Master-Planned Community Survey. He also covers the 6 major Northeastern markets for our monthly Metro Analysis and Forecast report and assists in our Short-Term Market Rating process.

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