Broad-based demand supported a solid sales year for builders and developers.
The surge in first-time buyer demand that we identified in 2017 continued to expand in 2018, benefitting many MPCs. Though numerous builders are shifting away from higher price points, move-up demand continued in 2018 at many masterplans, but at more subdued levels than earlier in the housing recovery. Strong demand among 55+ buyers also supported sales at the top 50 masterplans, in both age-targeted sections and mixed within the larger community.
Amenities feed into the masterplans' lifestyle.
Masterplan developers continue to look for the newest ways to attract buyers to their masterplans, and unique amenities always seem to be a hot topic. From large investments, such as the Crystal Lagoon in Balmoral, to smaller investments like cornhole in Lakewood Ranch, the developers who create a sense of community by incorporating multiple demographic groups, while also generating social media buzz, reap the largest benefits.
Giant sales at Balmoral
With a 345% increase year over year, the Balmoral masterplan developed by Land Tejas on Houston’s northeast side wins the title for most improved sales, exploding from a partial sales year in 2017. Senior Vice President David Jarvis observes that Balmoral opened Texas’s first Crystal Lagoon amenity this year to great excitement. The developer has plenty of additional lots under development for 2019 sales.
Supply constraints sometimes limited 2018 sales.
Developers were challenged to deliver lots at a pace matching builders’ demand, and temporary lot gaps were common in many strong housing markets. Bad weather, development trade shortages, understaffed jurisdictions, and backlogged power companies created plenty of headaches.
Two developers placed 4 or more MPCs each in the top 50.
Johnson Development accounts for 6 of this year’s top 50 masterplans—5 in Houston and one in Dallas. In addition, Lennar claims 4 of the top 50 masterplans, including those developed by its Friendswood Development and Five Point Communities affiliates and through ventures with other builders. Several developers have 2 masterplans in the top 50, including Brookfield, DMB, The Howard Hughes Company, Land Tejas, Newland Communities, KB Home, DR Horton, and Stratford Land.
Notable regional shifts versus 2017
More Southwest masterplans ranked in the top 50 this year, as in-migration from California and other regions augmented strong local demand. Phoenix claims 5 of the top 50 masterplans, which captured over 2,700 new home sales or nearly 10% of the sales at top 50 masterplans. Eastmark, the #1 Phoenix masterplan developed by Brookfield and DMB, beat prior annual records to top 900 sales in 2018.
- Southern California masterplans represent 20% of the top 50, up from 12% in 2017, but 10% of the top 25.
- Northern California has fewer large-scale masterplans, capturing 8% of this year’s top 50 compared to 6% in 2017, with only 4% of the top 25.
- Southwest masterplans claim 24% of the top 50, flat YOY, but the region’s share of the top 25 jumped to 36%.
- Texas captures 28% of our 2018 top 50, the highest share of any region, despite cooling from 30% last year. Sienna Plantation by Johnson Development is the only Texas masterplan to place among the top 25 ranking in 2018.
- Florida captured 22% of this year’s top 50, similar to 2016 and 2017, but 24% of the top 25. Sarasota’s Lakewood Ranch and West Villages mega-masterplans captured two of the top 5 rankings.
- In the Southeast, Cane Bay Plantation in Charleston was the only masterplan to rank among the top 25, staying on our list for years. Outside of Charleston, the large Southeast metros have few large-scale masterplans.
Numerous single-builder communities have sales rivaling the masterplans.
We exclude from consideration masterplans with only one active builder to avoid sharing confidential, community-specific information at the request of our publicly traded home builder contacts. Numerous entry-level and 55+ communities would qualify for our ranking if we removed the multiple builder requirement. The Exchange by Edge Homes in the Provo MSA and Lennar’s ChampionsGate and Storey Lake projects in Orlando are great examples of single-builder communities with gigantic sales.
John Burns Real Estate Consulting congratulates the developers and home builders that achieved our top 50 ranking. Please contact Jody Kahn or Devyn Bachman at dbachman@realestateconsulting.com for information on any of the top masterplans.
