Yahoo Finance New Homes Defy Odds: Sales Surge 14% in Top Master-Planned Communities
A lack of resale home inventory has pushed new home sales in the 50 top-selling master-planned communities up by nearly 14% in 2023 compared to sales in 2022, according to a report from RCLCO Real Estate Consulting.
Despite concerns about a recession and high interest rates, sales among the top-selling communities had increased compared to the first half of 2022, according to RCLCO's mid-year 2023 report. Rising mortgage rates dampened home sales in early 2022, and when they fell in early 2023, new home sales rebounded.
By that time, most homebuilders were offering incentives, including buying down rates, and the new home market responded well.
"Builders deserve a lot of credit for drawing would-be resale buyers to the new home market through interest rate buy-downs, shorter build cycles and the delivery of spec homes," said Laura Cole, senior vice president of Lakewood Ranch, a master-planned community in Sarasota, Florida.
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Tim Johnson, director of community sales and marketing for Sunterra developer Land Tejas, said that the willingness of new home builders to offer interest rate buy downs helped many buyers purchase a new home they otherwise would not have been able to afford.
"This was a huge help for many people who wanted to make the dream of new homeownership a reality," Johnson said.
Top 10 Master-Planned Communities
| Master-Planned Community | City, State | Developer | YTD Sales 2023 | YTD Sales 2022 | Percent Change |
1 | The Villages | The Villages, Florida | The Villages | 3,029 | 3,923 | -23% |
2 | Lakewood Ranch | Sarasota, Florida | Schroeder-Manatee Ranch Inc. | 2,257 | 1,846 | 22% |
3 | Sunterra | Katy, Texas | Land Tejas/Starwood Land | 1,293 | 795 | 63% |
4 | Summerlin | Las Vegas | Howard Hughes Corp. | 1,090 | 782 | 39% |
5 | Bridgeland | Cypress, Texas | Howard Hughes Corp. | 985 | 567 | 74% |
6 | Cadence | Henderson, Nevada | The LandWell Co. | 964 | 571 | 69% |
7 | Babcock Ranch | Punta Gorda, Florida | Kiston and Partners | 953 | 934 | 2% |
8 | Silverleaf | St. Augustine, Florida | Hutson Cos. | 896 | 1,034 | -13% |
9 | Wellen Park | Venice, Florida | Wellen Park LLLP | 887 | 722 | 23% |
10 | Ontario Ranch* | Ontario, California | Multiple developers | 865 | 626 | 38% |
*Estimated sales based on preliminary reporting in December by community representative
Source: RCLCO Real Estate Consulting
The Houston metropolitan statistical area (MSA) was the top-performing MSA with 12 communities in the Top 50, representing 23% of all sales among top-ranked master-planned communities. Florida accounted for about 40% of sales among the top-ranked communities, followed by Texas at nearly 37%. Five of the Top 10 communities are in Florida.
Developers surveyed by RCLCO are optimistic about sales in 2024. They expect mortgage rates will gradually decline as the Federal Reserve cuts the Federal Funds rate, potentially providing a boost to the new home market and master-planned communities.
"The perception of the economy during an election year, the need to keep inventory levels sufficient to meet demand and affordability challenges related to interest rates and home prices are all key items of concern to look out for in 2024," said Craig Martin, CEO of Windsong Ranch developer Tellus Group.
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