Even as home sales have shrunk and other builders have pulled out of markets, The Mungo Cos. has managed to keep sales steady and move into new markets.
During the past few months the Irmo, S.C.–based builder has added two new markets to its portfolio—Savannah, Ga., and Greenville, S.C. The company, which closed 660 homes with $123 million in revenue in 2010, is on track to deliver 700 homes this year.
“We are not going to beat [last year’s sales] by much, but we will beat it,” said Steven W. Mungo, a principal in the company.
Both Savannah and Greenville offer diverse sources of employment, something Mungo looks for in potential expansion markets. Greenville also is close to and in the same metropolitan statistical area as Spartanburg, a market where Mungo was already building.
Greenville is home to a number of regional corporate headquarters, creating a group of professionals in need of homes. Plus, the BMW auto plant brings high-paying jobs to blue-color workers.
“The average [home] sales price in Greenville is significantly higher than it will be in Columbia,” the company’s headquarters’ market, Mungo says. “You could have a two-income BMW [employed] family making $150,000 to $170,000 a year. A blue-collar worker there can afford a lot of house.”
And they are buying them, often from Mungo since its competition in the area decreased when many builders moved out. “Six of the eight builders there five years ago are not there now,” he said. “They have withdrawn from the market or have gone out of business. There was a big void at the top of the production chain.”
Likewise, sales in Savannah are doing well, says Mungo. The military presence near Savannah, the expansion of the jet manufacturer Gulfstream, and the expansion of the Mitsubishi Power Systems production plant for gas turbine parts all are contributing to the area’s economic expansion. Plus, in Savannah, as well as Charleston, there are a number of discretionary buyers who could live anywhere and choose to live in those desirable cities, he said.
Mungo’s focus is building houses for middle-market buyers. “Our goal in any market we are in is we want our average sales price to be whatever the median home sales price is,” Mungo said.
Teresa Burney is a senior editor for Builder magazine.