In a move that would not have turned a head four years ago, but raises eyebrows today, Mattamy Homes has moved into the Orlando, Fla., market with plans to start sales in four new communities within the next 60 days.
The Canada-based builder, with its U.S. headquarters in nearby Winter Park, Fla., has been planning to buy land and build in the area for the past year. But the fast-falling market caused the builder to move slowly, exploring market data and waiting for the best land deals before making such a move.
“We wanted to do more market research to make sure that we were spot-on with our product offerings,” said Laura Bailey, vice president of sales and marketing. “I think that’s prudent business procedure. There is not a lot of room for error in today’s market.”
But despite the national downturn, Mattamy has faith in the Orlando market, according to Bailey. “I think Orlando is always going to be a great area because of the job opportunities that we have here and the tourist industry,” she said. “We are going to see real soon if our hypothesis is going to be true. We have been looking for land deals for quite some time, and we are still looking.”
This expansion stems from four Orlando-area parcels which were purchased by Mattamy near the end of last year. "They were priced right and made good business sense,” said Bailey, who says three of the four will be townhome developments. The fourth will be composed of single-family homes.
One of the townhome projects consists of 68 sites for three-story townhomes in high-end Baldwin Park, a traditional neighborhood development. Mattamy expects to sell homes with square footage between 2,100 and 2,300 at prices in the $200s and $300s.
Mattamy will also be building in areas such as Lake Burden, Lake Jean, and near the Millennia Mall.
How is Mattamy able to expand at such a difficult time in the housing market? Unlike other U.S.-based builders who may be saddled with excessive and devalued land as a result of the downturn, and little spare cash or credit available for any new land deals, Mattamy has the advantage of Canadian ownership and a smaller land burden than many of its American counterparts. “Fortunately we are not in that situation, and we have the financial stability,” said Bailey. “It’s exciting to be working for a builder that is in the growth mode.”
Mattamy currently builds approximately 1,000 homes annually, but plans to grow to five times that in the next five years. It sounds a little crazy in the current downturn, but Mattamy’s owners have experience with investing—and succeeding—in slow markets. After all, the builder, now one of Canada’s largest in new home construction, was established in 1978, during one of Canada’s depressed housing cycles.
Still, Mattamy is moving cautiously regarding other expansions. Plans to expand to Tampa, Fla., and Raleigh, N.C., are on hold for the moment, according to Bailey. (Mattamy also builds in Jacksonville, Fla., Minnesota, Arizona, and the Carolinas.)