Texas Follows Florida in New Home Sales Within Master-Planned Communities

No state in the union likes its master-planned communities quite as much as Florida, but according to numbers from RCLCO Real Estate Consulting, Texas is a close second.

According to figures from the real estate market research company, new home sales among the 50 most-popular master-planned communities fell by 20 percent in 2022 compared to 2021. The study, rising interest rates, and affordability issues — particularly in the second half of the year— have had a significant impact on visitor traffic and new sales.

Slowing Sales in Master-Planned Communities

New home sales within master-planned communities for the second half of 2022 were 13 percent lower than the first half of the year, further highlighting the struggles faced by buyers as mortgage rates peaked above 7 percent in October. In each of the last 12 months, as shown in the chart below, new home prices have ranged from 10 to 30 percent higher than the previous year.

In an effort to combat the adverse impacts of decreasing affordability, developers of master-planned communities have noted that their builders are beginning to introduce or otherwise focus on smaller products at more affordable price points. In addition, many builders are also offering incentives to entice buyers, including buying down interest rates or taking on additional closing costs.

“If you look at the graph of our monthly sales plotted along with how interest rates behaved, the steady decline in monthly sales volume follows the interest rate line going upward pretty clearly,” said Cameron Jackson, senior vice president of operations at Larry H. Miller Real Estate. “Weakened market fundamentals and consumer confidence will make things challenging in 2023 until the fed feels inflation is under control.”

Top Texas Master-Planned Communities

While Florida claimed six of the 11 best-selling master-planned communities in the country, Texas has three. Silverado in Aubrey, Texas, ranked No. 6 in the RCLCO list of best-selling master-planned communities with 820 home sales in the D.R. Horton development — a 100 percent increase from just 411 sales in 2021. Hunt Communities’ Mission Ridge in El Paso, Texas, had 805 sales in 2022, which is a 1 percent decrease from the 811 new home sales the community had in 2021. Sunterra, a Katy, Texas, development from Land Tejas/Starwood Land, saw 789 sales in 2022, which was the master-planned community’s first year on RCLCO’s ranking.

On the list of the best-selling master-planned communities in America, the Houston MSA had more locations on the list than anywhere else with 13 neighborhoods representing 6,000 sales, or almost 19 percent of all sales among the ranked master-planned communities. However, the state of Florida represented about 46 percent of sales among ranked communities, followed by Texas at nearly 30 percent.

You can find the full report from RCLCO here.