Bungalow Bonanza Meritage Homes converts townhome lots into detached bungalows.
Courtesy Meritage Homes Bungalow Bonanza Meritage Homes converts townhome lots into detached bungalows.

The parcel came with one of the most prestigious addresses in the Orlando, Fla., area—the town of Windermere, home to Tiger Woods. But it also included what Meritage Homes considered a liability to the high-end feel it wanted to create in the neighborhood, 130 townhome lots on the edge of a community platted with 60- and 50-foot-wide, big-house lots.

“There’s a company aversion to townhomes, especially in this market” where they can carry a stigma, says Brian Kittle, vice president of sales for Meritage in Orlando. “We were concerned about who might come in [and develop the townhome lots]. We wanted to maintain some control over that.”

So Meritage bought the 130 townhome lots at Windermere Landing, as well as the high-end, bigger lots. Next it had the townhome lots down-zoned from 130 attached townhomes to 107, 32-foot-wide, single-family lots. Then it designed a 24-foot-wide bungalow home with detached rear garage to fit the spaces.

The builder set up a trailer sales center in the undeveloped neighborhood last April and sold six of the bungalow homes in a week without a model in place. In five and a half months, 52 of the bungalows had contracts pending construction, and the starting price for the 1,970- to 2,185-square-foot homes rose from $193,000 to $208,000.

The larger homes in the neighborhood, which go from 2,260 square feet to 4,860 square feet and from $300,990 to $386,990, were selling well, too, but the bungalows on the former townhome lots were an unexpected slam-dunk success. The location is incredible,” says Kittle. “To be able to live there for that price in that location was a no-brainer.”

If Meritage had built typical attached townhomes on the site, it would have had a lot of nearby competition from several national builders who have been pulling in two to four sales a month, Kittle says. “If we wanted to play, we had to come up with a different strategy, something more desirable than competitors down the street,” Kittle says.

By building detached homes in the same price range as the attached products, Meritage created what Kittle calls a “townhome slayer” that attracted buyers who would have bought a townhome, offering them something different and better. “With this, you get a detached product with some yard space, and you are not hearing your neighbors brushing their teeth,” says Kittle.

The three-bedroom homes even offer a bit of a backyard between the back of the house and the detached alley-loaded two-car garage. And, in addition to a dining room and living area separate from the great rooms, the homes also offer space upstairs for a loft or den.

The dynamic sales in the community have set Meritage up for a challenge most builders haven’t faced in more than a few years—a strong backlog of homes to be built quickly.

The first six bungalows that sold during the first week of sales in April were scheduled to be finished at the end of October. Meritage told the buyers of 42 other homes that they should be able to move in by Christmas. Kittle said the builder is up to the challenge. “It’s a well-oiled machine,” he says.

Now, a visit to Windermere Landing feels like a time-machine trip back to 2005. The sound of saws and nailguns is pervasive, and the streets are clogged with trade contractors. One afternoon in October there was even enough action in the community to attract a sandwich truck that had a line of workers waiting to buy lunch.

“It feels good, I’ll tell you that,” says Kittle.

Learn more about markets featured in this article: Orlando, FL.