The Berkshire Hathaway-Clayton Properties Group family of private site-build home building operators has reached 10 members. Deepening the local market clout its 2018 acquisition Mungo Homes wields in the Carolinas market, Clayton added Triad, North Carolina's No. 5-ranked operator--Shugart Homes--to the Mungo regional power base.
The purchase extends the Mungo operating footprint northward of its Raleigh-Durham arenas to the Triad--Greensboro, Winston-Salem, and High Point--and pairs two family-run, fire-in-the-belly enterprises, each with more than half-century worth of well-deserved strong reputation and trust in their respective turfs. Consider the Mungo-Shugart combination an example of fine-tuning on Clayton's part in its masterplan to win dominance as a builder for entry-level buyers where momentum in that price tier continues to kick butt.
BUILDER sibling firm Metrostudy regional director Amanda Hoyle notes that Shugart's trailing 12-month closings after the Q1 2019 totaled 275, or 8.3% of a market led by D.R. Horton's Express brand, and Century Communities' Wade Jurney Homes, which closed 315 and 313 homes during the past 12 months, respectively. All told, the Triad market's generating just over 3,300 starts and closings, but growth--albeit plodding--is expected.
Hoyle's observations on Triad area single-family pricing go far to explaining Clayton and Mungo's interest in adding the Shugart team and its submarkets to its line-up. She writes:
The average base price for a single family new home in the Triad has been increasing, on average, about $2 a square foot each quarter for the past year and is up 7.9% from a year ago, but the pace of price increases each quarter has been slowing.
In first quarter 2018, the average single family home measured 2,466 square feet with an average base price of $268,511, or nearly $110 a square foot. The year prior, the average home was slightly smaller at 2,439 square feet with a base price of $247,463, or $102 a square foot.
Compared to its counterparts in the nearby Triangle and Charlotte regions in North Carolina, however, the Triad housing market falls more in line with affordability standards. About 66% of the Triad’s new home construction inventory had a base price below $250,000. The median price of a new home sold in North Carolina in 2017 was around $288,800.
Pricing of models in communities promoted on Shugart's website range in general from the low $200s to the mid-$300s, with most in the mid-to-high $200s.
Apart from the ability to leverage deeper local scale, and greater exposure to entry-level buyers, Clayton and Mungo also get to enrich the Carolinas area talent and relationships bench, as expectations for the Carolinas housing markets emerge as one of the more downturn resistant geographies based on economics, job growth, household formations, and affordability. Cultural alignment, hyper-focus on customer care, business experience--and successful navigation--through at least one downturn, and a willingness to stay on as an operator-leader are the four essential boxes Clayton Properties Group execs look to check off on for each of its new family additions.
Check. Check. Check. Check.
The Mungo Homes press statement reads as follows:
COLUMBIA, S.C. (July 1, 2019) - Mungo Homes is pleased to announce that Shugart Homes of the North Carolina Triad, which includes Greensboro, Winston-Salem, and High Point, is joining Mungo Homes, a part of the Clayton Properties Group®. Like Mungo, Shugart began as a family-owned and operated business and has more than 50 years’ experience in new home construction. The two companies share not only a similar history, but company values that align and are based on customer service, quality, innovative building and design, and community reinvestment.
“The partnership with Clayton has given us this opportunity to grow,” said Mungo Homes CEO Steven Mungo. “The joining of Shugart Homes and Mungo Homes creates tremendous synergy and adds a strategic location to the Mungo footprint. We are excited to work together to serve the housing needs of the Triad area for years to come.”
Mungo Homes was acquired in November 2018 by Clayton Properties Group, a Berkshire Hathaway company, whose business model is structured on partnering with world-class companies in strong growth markets that share a resounding commitment to team member and customer experience. The partnership with Shugart stays consistent with Clayton Properties Group’s previous acquisitions and will help ensure long-term growth and stability for the Triad builder.
“We are thrilled to join Mungo Homes and become part of Clayton Properties Group’s distinguished builders,” said Shugart Homes Vice President Brian Shugart. “Our cultures and commitment to quality and care align seamlessly, and we look forward to continuing to provide quality homes and great customer service to our homeowners.”
Only positive changes for Shugart team members are expected, and there will be no shifts in management, with Vice President Brian Shugart continuing at the helm.
