Everything is bigger in Texas, including the size of the new-construction market. The Lone Star State is home to four of the five largest new-home markets by 2023 closing figures, according to Zonda’s recently released Local Leaders list.
Taken together, the Dallas, Houston, Austin, and San Antonio metros were home to 111,265 new-home closings in 2023, according to Zonda. Strong in-migration, healthy job growth, and a strong business climate is driving the positive momentum for the new-home market in Texas metros. With the size and strength of new-home construction, the state is also a hub for master-planned community (MPC) development. Houston is home to the top two selling MPCs in all of Texas—Sunterra and Bridgeland—while Dallas is home to several large-scale amenitized MPCs as well, including Walsh.
Walsh, a development partnership between Republic Property Group and the Walsh family in Fort Worth, has introduced 700 homesites in two new neighborhoods over the past year, demonstrating the strength and resilience of MPCs despite larger uncertainty in the housing market. In addition to Walsh, Republic Property Group has produced the Light Farms MPC in Celina, Texas, and Phillips Creek Ranch in Frisco, Texas.
“Dallas-Fort Worth's growth and housing demand drivers are incredible, making it ideal for quality MPC developments. DFW remains one of the top U.S. markets in the country for job growth, population growth, significant corporate relocations, real estate investments, and in-migration,” says Jim Henry, senior vice president of community operations for Republic Property Group.
Cameron Cook, community marketing and retail programming director at Walsh, says given the difficulty for buyers and sellers, particularly in the resale market, MPCs such as Walsh are emerging as attractive alternatives.
“People are struggling to price their existing home, [and] the resale market has been tough to navigate. I think that is one of the advantages of purchasing a new home in an MPC, especially in a tighter market with low inventory. There is less competition,” Cook says. “You’re oftentimes not going up against multiple offers on a home, you don’t have to negotiate certain closing costs and try to go back and forth with a resale transaction.”
Henry says the outlook for MPCs is positive as they often have more “tools in the toolkit and may have more ability to ride out uncertainty, particularly if well planned and well financed.” In Walsh, the diversity of product types—ranging from townhomes to custom homes on lot sizes of 35 feet up to 70 feet—and price point provide options for all types of prospective buyers given the general affordability challenges facing the overall housing market.
“Having multiple products across the pricing spectrum, as well as new products that often are incentivized keeps the community well positioned to ride out the ups and downs of the economy,” Henry says. “If [community leaders] have established their value proposition, they will have an easier time navigating cycles as you’ve hopefully generated preferred demand.”
Builder Interest in MPCs
Cook says nine production builders are involved in building within Walsh, and the community has experienced “a surge of inquiries” from builders not already enrolled in the Walsh builder program that are interested in being involved in the community.
Henry says for builders, the ability to offer multiple products that complement one another within an MPC can help achieve volume goals. Additionally, he says builders also appreciate developers such as Republic Property Group that design and bring solutions “across the entire life cycle of a community.”
“That intentionality as it applies to the operating platform gives the builder stability and enables them to plan for the future,” Henry says. “Our builder partners put many of their best people in the community and participate in the educational aspects so they can deliver the same message to buyers that we deliver. The higher value you can create translates to higher value for the builders and loyalty to their customers and our future residents.”
Challenges and Opportunities
Henry says that in addition to the general housing market challenges—interest rates, supply constraints, rising costs, and competition—typical MPCs are positioned at a higher price point and come with a dues regimen that buyers may be unfamiliar with.
“It’s important to ensure your sales and marketing plans are well crafted to help buyers understand the value proposition. That is an educational process that begins early,” Henry says.
At Walsh specifically, Cook says the wide range of price points—starting in the $400s and rising to custom homes built in the $1.5 million range—allows the community to cater to a variety of buyer types with diverse desires for their homes.
“From a supply side, because the MPC platform embraces a wide variety of products, building a partnership with the right builders makes it easier to respond to the market with new products,” Henry says.
Early intentionality—related to programming, product composition, and the experiential component of the community—are important for the resiliency of an MPC. Henry says MPCs with good operating platforms and good HOA management teams help developers and builders continue to deliver value post-sale to residents.
While builders are grappling with lot and land supply constraints and high land prices, being involved with MPCs offers the ability to ensure a future pipeline of lots in any environment.
“It’s challenging for smaller builders to self-develop and to find the capital and the land. Plus, they are likely moving to farther out locations, but work-from-home is helping with greater acceptability of these locations,” Henry says.
Additionally, MPCs benefit from the ability to offer residents a stronger sense of community that may be typical with strong lifestyle programming that fosters social gathering and engagement between neighbors. Cook says in addition to an athletic club and pool, Walsh offers programming to target a range of age groups—from Lego and Spanish camps for younger children to a makerspace that allows adults to practice woodworking.
“Setting the stage to participate in a genuine way is an important component of creating higher demand and helps underscore the value proposition,” Henry says.
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