Community and Resort
March 5, 2014
Washington, D.C., Master-Planned Communities on the Rise
By: Melina Duggal, Senior Principal
The big story for master-planned communities (MPCs) in the Washington, D.C., area in 2013 is that they were generally able to achieve sales similar to or above 2012 levels, despite the challenges confronting D.C.-area home sales. Residential sales in 2013 in the Washington area were strong during the first half of 2013, but, as one of the MPC developers we interviewed noted, we had a “Jekyll and Hyde market in 2013.” Another noted that the government shutdown and sequestration “took the wind out of the sales.” The good news is that this should be behind us, and all of the developers and builders we interviewed expect 2014 to be a better year than 2013.
Every year since 1994, RCLCO has conducted a national survey identifying the top-selling MPCs, followed by in-depth interviews among the top 20 to reveal the trends behind the numbers. This year, Brambleton in Loudoun County, with 373 net sales, was number 18 on the national list. In addition to Brambleton, the D.C. area, for the first time in a number of years, has a large number of MPCs across the region that are selling well. Four projects in Loudoun County together accounted for approximately one-third of the total new home sales in the county, and the seven projects in Table 1 captured approximately 15% of the region’s new home market.
Five of these communities are located in the favored quarter of growth, including four in Loudoun County, but location alone is not what sets MPCs apart from single-product subdivisions. They all create a lifestyle and offer a wide range of products targeting the entire spectrum of the market. Figure 1 below shows the locations of these projects.
RCLCO is often asked what makes a successful master-planned community. There have been changes over time, but many of the qualities that marked success in the first MPCs are still prevalent in the newest MPCs. Some of the proven keys to success include:
There are two trends from the last couple of years that we are watching closely in newer MPCs—product innovation and a strong, distinct orientation.
Most of the large-scale MPCs in the region have been experimenting with new architecture, product lines, and floor plans. This has brought an exciting new element to the D.C. market, and buyers have been very responsive to the new plans. In Willowsford, Arcadia Communities is offering a completely different line of homes both from a floor plan perspective (single-story product) and from an architectural perspective (Prairie style architecture). All of the builders in Willowsford are offering product that is only available in Willowsford. Even the larger national builders, such as Beazer Homes and Pulte Homes, have floor plans that are unique to Willowsford. The interiors have also been decorated in a manner that is unique in Northern Virginia.
It’s not just high-end communities that are offering new product types. St. Charles offered a 20’ townhome product with a detached garage by Ryan Homes. They didn’t expect this to be a best seller, but consumers loved the three levels of living that were provided because the garage was detached. These townhomes appeal to single moms and entry-level buyers, as well as empty nesters.
At One Loudoun, Miller & Smith and Camberly Homes are offering a downtown single-family home collection on small lots with rear-loaded garages and front steps leading up to the front door. The product is unusual for Loudoun County in that it offers a smaller home on a smaller lot in an urban configuration. Of note, all of the single-family detached homes at One Loudoun have maintenance included. This has proved to be very popular with buyers, in particular downsizers who like the feel of a SFD but are not interested in the yard work.
Finally, at Potomac Shores, NVR, through their Ryan Homes and NV Homes divisions, is offering a new set of floor plans for buyers. They have been successful offering an upscale, unique home that is priced substantially above the eastern Prince William County market. This is confirmation that a well-executed MPC can perform above the local market by providing an upscale community and home product. Consumers can be willing to pay for quality, even in markets where more upscale product is not typically offered.
Another key trend we have noticed in successful MPCs is the strong, distinct orientation of the projects. Clarksburg Village is a hybrid traditional neighborhood design (TND) that offers the lifestyle and architecture of TND projects, but also includes front-loaded product. It offers residents a great lifestyle, including amenities, schools, and retail, in a walkable setting with distinct architecture.
Each of the large projects in Loudoun County offers a unique orientation that helps differentiate it from the others. One Loudoun is providing an urban setting in the suburbs; Willowsford is providing a farm, open space, and agriculture; Brambleton has a large town center and provides the time-proven MPC lifestyle; and Stone Ridge features a live/work/play orientation with many product lines. The key for these large projects is finding their brand and theme, and using them to market the project and set the tone for the entire experience.
What Are We Not Seeing?
It is also interesting to note what we are not seeing in these Washington-area MPCs:
What to Watch in 2014 and Beyond
RCLCO spends a lot of time thinking about and researching the future of the housing market. Here are trends we, and our clients, are watching:
Overall, 2013 was a strong year for D.C.-area MPCs. The sheer number of large projects with sales of approximately 250 or more per year is a testament to the returning strength of the market, and to buyers’ willingness to pay for the quality, lifestyle, and convenience that is offered in large-scale MPCs.
Article and Research prepared by Melina Duggal, Senior Principal.
RCLCO provides real estate economics, strategic planning, management consulting, litigation support, fiscal and economic impact analysis, and implementation services to real estate investors, developers, home builders, financial institutions, public agencies, and anchor institutions. Our real estate advisors help clients make the best decisions about real estate investment, repositioning, planning, and development.
RCLCO’s advisory groups provide market-driven, analytically based, and financially sound solutions. RCLCO’s Community and Resort Advisory Group produced this newsletter. Interested in learning more about RCLCO’s CRAG? Please visit us at www.rclco.com/community-and-resort.
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