30th Edition: The Top-Selling Master-Planned Communities of 2023

Every year since 1994, RCLCO has conducted a national survey identifying the top-selling master-planned communities (MPCs) through a rigorous search of high-performing communities in each state. This initiative, now in its 30th consecutive year, exists not only as a way to commend the most successful communities in the country, but also as a tool for monitoring the overall health of the for-sale housing industry, and a means of highlighting the trends affecting communities large and small. This process also serves as a mechanism through which to learn development best practices and pass along lessons gleaned from the MPCs that have pioneered their way into the top ranks. That information contributes to the knowledge base utilized in RCLCO’s MPC consulting practice. Now, in this 30th Edition for 2023, we have surveyed MPCs throughout the country to update the rankings of The Top-Selling Master-Planned Communities of Mid-2023.

The chart above summarizes RCLCO’s list of the 50 top-selling communities of 2023, including a comparison with their home sales in 2022 where applicable. Sales among the Top-50 communities increased by nearly 14% in 2023 compared to the slower sales pace set by the Top-50 MPCs of 2022, with many developers citing more favorable inventory levels and better access to the materials needed for new construction than in previous years. Sales in the second half of the year were slower than the first half, based on the performance seen in RCLCO’s Mid-Year 2023 report, due to somewhat lower overall job growth in the second half of the year, mortgage rates peaking at 7.8% in October, and slower economic growth in the fourth quarter.

The Villages, an active adult community in Central Florida, is once again the top-selling community in the country with 3,029 sales. Sarasota, Florida’s Lakewood Ranch claims the top spot among all-ages communities, with 2,187 sales, representing an 18% increase and the 2nd best sales year in the history of the community. Sunterra, a Land Tejas/Starwood Land community in Katy, Texas, earned the third-place rank with 1,293 sales, a 63% increase over 2022. Due in part to Sunterra’s performance, along with 11 other communities ranked within the Top-50, the Houston MSA is once again the top-selling metro area in the country with nearly 8,300 sales representing 23% of sales among ranked communities.

Top-Selling Master-Planned Communities of  2023

In our Mid-Year 2023 Update issue of RCLCO’s Top-Selling Master-Planned Communities Report, we reported that sales among Top-Selling communities had increased compared to the first half of 2022, despite concerns for a possible recession and elevated interest rates. Rising mortgage rates had a dramatic impact on new home sales in early 2022, which lasted until rates fell somewhat in early 2023 and new home sales rallied. By that time most major homebuilders were offering significant incentives including buying down rates, and the new home market responded well. As rates hit a peak of 7.8% in October, typically a slower time of the year for home sales anyway, new home sales slowed, and the second half of the year ended slightly below the pace set by the Top MPCs in first half of the year. Lower job growth through the second half of the year influenced new home sales activity, in addition to rising interest rates and slower economic growth in the fourth quarter.

Overall, 2023 MPC sales exceeded expectations. Many developers participating in this survey cited the incentives offered by builders as a key ingredient for 2023’s successful pace of MPC home sales. According to Laura Cole, Senior Vice President at Lakewood Ranch, “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.”

While the influence of builder incentives was not unique for Lakewood Ranch, the results were impressive for the Master-Planned Community that will celebrate its 30^th anniversary in 2024. With 9 new residential villages and neighborhoods planned for the coming year, 2023 represented the 2^nd best sales year in the community’s history.

Cassie Cataline, Marketing Director at the top selling Nexton community, observed that “our focus on segmentation has been a crucial part of achieving sales success, in a location with strong employment and climate that attracts retirees. Establishing a walkable community with vibrant retail and amenity programming has helped foster a lifestyle that buyers continue to be attracted to.”

Tim Johnson, Director of Community Sales and Marketing for Land Tejas, noted that “In 2023, the willingness and ability of new home builders to offer interest rate “buy downs” on their homes helped many buyers purchase a new home that they would not have otherwise been able to afford. This was a huge help for many people who wanted to make the dream of new home ownership a reality.”

Looking forward to 2024, many developers spoke optimistically about their projections for future sales. The expectation is that mortgage rates will gradually decline in 2024, as the Fed cuts the Federal Funds rate, potentially providing a further boost to the new home market overall and to MPCs in particular. With falling rates, strong underlying demographic trends, and a market that is now less constrained by access to materials or shortages of new home inventory, sales in the second half of 2024 could rebound from near-term declines. The new home inventory of 451,000 new homes available for sale at the end of November represents 9.2 months of supply, up from 7.8 months in October of 2023, largely a function of slower sales in the fourth quarter. Key concerns cited most often by developers for the coming year were summarized well by Craig Martin, CEO of Tellus Group, developer of Windsong Ranch, who noted that “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.”

New Home Market Trends and Outlook for 2024

New home sales volume more broadly was up year-over-year for most of the summer and fall of 2023 but slowed to an annual rate of 590,000 sales in November of 2023, just 1.4% above November 2022, and 12.2% below October 2023, as shown in the graph below.

Despite potential slowing in Q1 2024, RCLCO anticipates new homes sales to gradually increase over the course of 2024, as mortgage rates slowly decline and the pace of home price growth moderates. The Mortgage Bankers Association currently predicts mortgage rates of 6.1% by the end of 2024, while Fannie Mae expects rates to dip to 6.5% over the same period. A “soft landing” for the economy seems more likely now than a recession, though economists forecast slower growth in early 2024 relative to 2023. Slower economic growth is likely to dampen the pace of new homes sales recovery in the first half of 2024, but as rates slowly decline and the economy picks up pace in the second half of the year, new home sales are expected to be back on pace with Q3 2023, as shown on the Fannie Mae forecast below.

30 Years of Master-Planned Community Reporting

As the longest running publication in the industry, RCLCO has produced the Top-Selling Master-Planned Community Report since 1994. In this 30th Edition, we look back on three decades of trends which have shaped the world of community development.

Master-planned communities (MPCs) are a special classification of residential development in that they are based on comprehensive plan by a master developer which incorporates a variety of housing types, sizes, and prices, with shared common space, amenities, and a vital public realm. The best MPCs, and those that are able to propel themselves into the ranks of the top-sellers, are typically developed with a strong vision and comprehensive plan that guide development and unify the community through distinctive signage, wayfinding, entry features, landscaping, and architectural/design standards. Beyond the built environment, MPCs differentiate themselves from typical suburban subdivisions by providing a means for interaction among neighbors in the sense of the word “community.” They foster an environment where generations can live better in terms of housing and community. Most include community gathering spaces, recreational amenities, and many include schools, neighborhood shopping and services, and even employment centers to complement the residential neighborhoods. Although rooted in a vision, the most resilient MPCs have flexible master plans that are environmentally sensitive, market responsive, and nurture the lifestyles of their residents. The mix of housing types, sizes, and prices offered within an MPC is highly correlated to its total annual residential sales, and that mix is often demand driven, and is typically the result of a carefully considered segmentation strategy. MPC sales, as distinct from the overall new home sales market, have the advantage that there is more demand than supply – more consumers want a home in a master planned community than there are homes in MPCs to meet that demand, according to RCLCO consumer research.

Over the last three decades, Master-Planned Community Performance (as described by the sales performance of the Top-10 MPCs in each year), has ebbed and flowed based on broader economic trends and overall new home demand. However, an analysis of MPC sales by five-year increment shows that the past several years of community development has been robust by historical standards. With over 66,000 sales over the past five years, Top MPCs have not performed this well since before Great Financial Crisis of the Mid 2000s. On average, the Top-10 MPCs over the last five years have sold 7% more homes each year than the annual average over the previous three decades, with sales in 2023 coming in 7% above the average.

In addition to the economic trends noted above, demographic tailwinds are another reason for optimism for the broader new home market overall, and particularly in relation to the market for homes in MPCs, whose diverse housing products and amenities are particularly attractive to new homebuyers. RCLCO will next take the pulse of Top Selling MPCs in July of 2024. In the meantime, please let us know if we can be a resource to you and your real estate activities.

The ranking of 2023’s Top-Selling Master-Planned Communities is based on total new home sales, net of cancellations, as reported by each individual community. Preliminary sales numbers were provided by communities in early December and annualized in order to arrive at estimated year-end sales, with final sales figures provided during the first week of January, and in some cases being updated periodically throughout the month. To be included in our ranking, MPCs must have a number of features. True MPCs are developed from a comprehensive plan by a master developer, and incorporate a variety of housing types, sizes, and prices, with shared common space, amenities, and a vital public realm. The best examples of MPCs are developed with a strong vision and comprehensive plan that guide development and unify the community through distinctive signage, wayfinding, entry features, landscaping, and architectural/design standards. Beyond the built environment, MPCs differentiate themselves from typical suburban subdivisions in that they provide a means for interaction among neighbors in the sense of the word “community.” They foster an environment within which generations can live better in terms of housing and the community environment, and many offer educational opportunities, neighborhood shopping and services, and even employment centers to complement the residential neighborhoods. Although rooted in a vision, the most resilient MPCs have flexible master plans that are environmentally sensitive, market responsive, and nurture the lifestyles of their residents.

Given the above criteria, we do not include the collective sales of multiple, separate communities that are unified only through marketing efforts rather than a preconceived community vision, nor do we include communities that are a collection of subdivisions that have few unifying elements other than consistent signage and name.

Article and research prepared by Karl Pischke, Principal, and Gregg Logan, Managing Director. Additional research support was provided by Kimberly Asbell, Shanren Brienan, Maggie Henderson, Jane Hutton, Jameson Logan, and Kendall Wheelock.

Since 1967, RCLCO Real Estate Consulting has been the “first call” for real estate developers, investors, public institutions, and non-real estate companies seeking strategic and tactical advice regarding property investment, planning, and development. RCLCO leverages quantitative analytics platforms and a strategic planning framework to provide end-to-end business planning and implementation solutions at an entity, portfolio, or project level. With the insights and experience gained over 55 years and thousands of projects, RCLCO brings success to all product types across the United States and around the world. RCLCO is organized into three overlapping and reinforcing service areas: real estate economics, management consulting, and advisory services for institutional investors through RCLCO Fund Advisors. RCLCO is headquartered in Bethesda, MD, and has offices in Los Angeles, CA, Orlando, FL, Austin, TX, and Denver, CO.

Disclaimer: Reasonable efforts have been made to ensure that the data contained in this Advisory reflect accurate and timely information, and the data is believed to be reliable and comprehensive. The Advisory is based on estimates, assumptions, and other information developed by RCLCO from its independent research effort and general knowledge of the industry. This Advisory contains opinions that represent our view of reasonable expectations at this particular time, but our opinions are not offered as predictions or assurances that particular events will occur.