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RCLCO Real Estate Consulting’s mid-year list of top-selling master planned communities shows the increased demand for new homes and interest in communities continues on strong this year. Home sales for the 50 top-selling communities exceeded forecasts, and results point toward a 12% increase in sales at the end of the year compared to 2020. The last mid-year report falls behind this most recent iteration by nearly 20% despite low housing inventory and building material constraints. On average, communities on the list experienced individual increases of more than 40% compared to the same period last year.
Much can change in 365 days, and nowhere is that more apparent than with the concerns and forward-looking projections of Master-Planned Community Developers. In July 2020, RCLCO’s Mid-Year Top-Selling MPC report highlighted the state of a market clawing its way back from a historic slump in sales caused by a global pandemic. At that time, buyers that had deferred their home purchase decisions in March and April had begun returning to the market, but significant uncertainty still remained as to how much demand could return while COVID-19 continued to cause seismic shifts in every aspect of the daily lives of consumers.
Fast forward to July 2021, we are now experiencing challenges that are the diametrical opposite of early 2020. New home demand which began to surge back in mid-2020 has only accelerated, owing to the prolonged experience of pandemic lockdowns and working from home which has led consumers to seek additional space, coupled with historically low interest rates and demographic tailwinds as the large millennial generation enters peak family formation years and transitions toward single-family living. Lakewood Ranch reports that buyers state they are looking to move close to family and friends, downsizing, or accelerating retirement. Year-over-year, Lakewood Ranch experienced the largest sales gains in the entry/1st move up segment (84% growth over prior year) which generally leans towards millennials. The empty nest/active adult market jumped by 71% at Lakewood Ranch during this period, and 2nd home move-up/luxury buyers increased by 57%.
These trends appear to validate sentiments echoed in RCLCO’s Mid-Year 2021 Sentiment Survey, where the majority (88%) of respondents indicated that national real estate conditions were moderately or significantly better when compared with one year ago. Professionals across the industry were polled about their perspective on the current state of various product types, and most indicated that their outlook for the remainder of the year was quite bullish, with 75% of respondents predicting that national real estate market conditions would be “moderately” or “significantly” better in the next year.
