Ask a homebuilder: What factors go into the planning of new communities?

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Ask a homebuilder

As land acquisition manager for the homebuilding company CastleRock Communities, Erica Sinner’s main responsibility is to seek and secure both raw development tracts and finished lots around the Greater Houston area. In order to do so, Sinner said she networks with developers, landowners, brokers and other builders.

CastleRock builds in the Houston, Dallas, Austin and San Antonio areas. Northwest Houston area communities where CastleRock homes can be found include Stone Creek Ranch and Lakewood Court.

For builders in the Greater Houston area, what are the factors that go into deciding where to buy land?

We look at a variety of factors from employment growth, road improvements, sales paces in surrounding communities (resale and new home developments), school performances [and] openings and new commercial [developments] opening up in the near future. When assessing where I target for potential deals, I work with the city and [municipal utility] districts to validate lot size requirements, drainage and wastewater impacts and whether or not we will get reimbursed for the roads and underground improvements we do in order to bring a community online. I also analyze what homes are being sold, at what price they are being sold at and how quickly builders are able to get a return on their investment.

Once land is acquired, what factors go into determining the types of homes and amenities to include?

There is a huge focus on the consumer we are serving in our community and what drives them to purchase a new home. We study myriad factors from what kind of product is attracting the buyers to their likes and dislikes in a neighborhood design. To achieve all this, extensive research is done out in the field during the week and on the weekends, interacting with homeowners and potential homeowners at events, parks and recreational activities. We also look at past performing communities as a predictor to how we should operate the business. Once we have all this data compiled, we sit down and discuss internally [the] best route [for] utiliz[ing] the land and what is needed to give us the best-selling outcome while meeting the consumer’s needs.

How do you determine whether to include multifamily as a part of a development?

Multifamily is typically brought in when pricing of the land is too high for single-family residential. If we are unable to put houses on the ground, we then will try to see if there is a market for an attached or detached town home product instead. If that is also financially unfeasible, and the seller is not willing to lower their pricing to accommodate, multifamily is then considered as an option. Since we are not a multifamily builder, we don’t usually get involved with the apartment aspects.

What trends you are seeing in the Northwest Houston area?

The northwest Houston area has been experiencing elevated land pricing over the last five years due to road expansions, dwindling large master-plan[ned]developments, and increased industrial/commercial footprints along the [Hwy.] 290 and Grand Parkway roadways. Any land bought during the 2014/early 2015 time period, when new home demand had hit its peak since 2008, is still producing rather high lot prices today and causing the homes that we offer in those communities to move at a slower pace. Still though, among all the areas in the Houston market, the north/northwest area continues to offer a wide range of land pricing that allows us to meet a variety of different profile groups. For us homebuilders, it’s an ideal place to grow our brand and consumer base.

What types of trends are you seeing with regard to the homes themselves and what buyers want?

This answer can really be all over the board, depending on what buyer [or] area our product is serving. There is one trend I’ve been following these last four to five years though, and that is the need to have more features and structural items included in a home but not necessarily pay more to have these things added on. This makes it challenging for us because if the price of the land is too high, and we aren’t able to pass along the additional cost of these items to the consumer, we may not be able to meet these needs to the best of our ability.

How did Hurricane Harvey affect the land evaluation process?

Since Harvey, we now ask more detailed questions around how the land weathered the storm. Our development costs have risen in some counties due to extra regulations put in effect after Harvey, causing some deals to fall flat and others to become extremely tight. We get very specific on what the current flood plain map states, what the new maps might say and how the parts of the land [and] surrounding land flooded or could potentially flood. All this affects the development of the land and home, contributing to higher home prices.

CastleRock Communities Design Gallery
10555 W. Sam Houston Parkway N., Houston