Pat Neal wore the smile of a man celebrating the end of seven years of famine and the beginning of what he thinks will be times of plenty as he shook hands and accepted plaudits at the opening of his newest community, Grand Palms in Venice, Fla., last Friday morning.
The CEO of Neal Communities, a Florida-based home builder and developer, has strong evidence that times are changing in his Southwest Florida domain. The company has sold roughly 45 homes a month this year and in August, traditionally one of the slowest of the year, sales agents logged 55 sales, surpassing the 53 it sold in February, which up until August was the biggest month Neal has had in a decade.
And Grand Palms—with 1,999 home sites, the largest neighborhood Neal Communities has ever created in more than 40 years of building—is expected to goose sales even higher. Even before the opening, home buyers were putting down deposits. By the end of the grand opening weekend, an estimated 4,500 people had toured the community, six sales orders had been taken, and another six are expected to be made by the end of this week.
Neal sees the changes as a result of low interest rates and pent-up demand that can no longer be contained, particularly among baby boomers who are tired of waiting to move to Florida.
“People have been postponing their move to Florida for seven years now,” said Neal at the grand opening. “It has been seven years of drought. There is an enormous amount of pent-up demand.”
Neal says boomer buyers are buying in Florida now, even if they haven’t sold their existing home. And he expects they will trade the “starter” Florida second home they buy now for a bigger primary home in three or four years after they’ve sold their homes up north. And Neal expects to sell both of them.
And it’s not just older buyers who have postponed buying a Florida home until now. Other buyers, too, turned off by the tired and tattered existing homes that remain on the market, will be drawn to new construction, Neal predicts.
“They are not homes that compete with us,” said Neal.
Like other Florida builders, Neal Communities struggled mightily during the downturn, but still managed to turn a profit every year but one, which was near break-even. Active-adult buyers, attracted to the cottage-style, less-expensive homes that Neal created when the market dried up, helped keep the company afloat.
Yet, even as the home building market tanked, Neal worked to create new communities that would be ready when the recession ended. Grand Palm was 10 years in the making. He spent two years assembling the land just east of Venice, Fla., which was owned by seven people. He spent two years visiting one owner who would have him over to eat her homemade baked goods.
“She would cook and we mostly had fun negotiating for two years,” Neal recalled. After the land was assembled in 2004, Neal spent another seven years negotiating with Sarasota County, which had passed its stringent 2050 land use plan designed to lessen impact of development on the environment and foster sustainability.
It took time, patience, and strong negotiating skills to get a development plan approved under the new rules. Grand Palm became the first community to make it through the process and start construction in 2011.
The community, not far from I-75, is targeted to a wide range of buyers, from first-time buyers to empty nesters. Prices start in the mid $100,000s and range in size from 1,079 to 2,535 square feet. There will be five different product lines and a variety of floor plans in each.
On Friday, Neal cut the community ribbon, opening up the first phase of 266 home sites and six model homes to a large crowd of vendors, employees, city and county officials, and interested locals. Neal whirled from one local official, to somebody who is interested in selling his land adjacent to Grand Palms, to his banker, to the media, greeting all with a big smile, a handshake, and a sound bite.
As the crowd thinned, sales agents began going through the models, dimming lights, even though the day was only half over.
“We have got to start writing contracts,” one explained.
Teresa Burney is a senior editor for Builder magazine.
Learn more about markets featured in this article: Bradenton, FL.