Don’t think for a minute that you can’t sell new houses today in your market or any other. Pat Neal is proving it can be done in one of the most challenging housing markets in America. In Central Park at Lakewood Ranch, just east of I-75 at the border between Florida’s Manatee and Sarasota Counties, Neal has sold 154 houses in 14 months. Three competitors sold 25.

Southwest Florida was ground zero of the housing market crash. For three years, beginning in 2003, home prices rose more than 30 percent each year. When that pricing bubble popped in 2006, the market dried up almost completely. In the five years since, many builders have gone broke, and most of the national public builders have beaten a path out of Sarasota and Bradenton. But not Pat Neal. Instead, Neal re-platted his land to accommodate smaller lots and homes, and aggressively assaulted his costs for building materials and labor to get home prices down to where he found a market.

Last year, Neal sold 272 houses in Sarasota and Manatee Counties for $74,706,647 in housing revenue, which works out to an average sale price of $274,657, quite a contrast from his average price of more than $500,000 in the mid-2000s. But he’s still working that average down. This year, Neal says he’ll close 397 homes for about $85 million in revenue.

Neal says he found a market for “first Florida homes,” meaning his downsized product sells to a mix of first-time buyers and his traditional market of pre-retirement snowbirds who own homes up north. But the snowbirds are now downsizing their retirement dreams to fit reduced budgets and their inability to sell their primary residences in the Midwest and Northeast.

 

Liberty II

 

 

 

 

 

 

The Liberty II model in Piedmont Park is the best-seller in all of Central Park. It’s 1509 square feet of air-conditioned space, base priced at $170,990. It was designed by BSB Design, out of the architectural firm’s Tampa office, with interior merchandising by pureSTYLE, the Bradenton, Fla., interior design firm headed by Charlene Neal (Pat’s wife). Buyer profile is a mix of young first-time buyers and snowbird second-home buyers from up north. As of late September, 24 Liberty II models have been sold.

 

 

 

Blue Sky II

 

 

 

 

 

 

The Blue Sky II model at Brickell Park, a home of 2147 square feet, priced at $214,990, is another hot-seller for Neal, designed by BSB Design and merchandised by Charlene Neal. Brickell Park is a separate section within Forest Park with its own gate. The homes are the same as those in the rest of Forest Park, but come with a maintenance free feature that appeals specifically to empty-nester retirees and snowbird second home buyers. As of late September, 10 Blue Sky II modes have been sold in Brickell and Forest Parks.

 

 

 

Endless Summer II

 

 

 

 

 

 

The Endless Summer II model at Claremont Park is 2165 square feet and sells for $226,990. Claremont is another gated, maintenance free community within Central Park, the larger community, which is also gated. These homes were designed by BSB Design, but the interior merchandising of these models was done by Marc-Michaels Interiors, the famed design firm headquartered in Winter Park, Fla. As of late September, 14 Endless Summer models have been sold.

 

 

 

Harmony

 

 

 

 

 

 

The Harmony model at Longview Lake Park is one of the large estate homes, all with three-car garages, at the top of Neal’s offering at Central Park. It is 2453 square feet, base-priced at $274,990, but offers a long list of options and upgrades that usually push sale prices well past $300,000. It was designed for the family market by BSB Design and pureSTYLE. As of late September, three Harmony models were in the works with no sales yet.

 

 

Central Park Tells The Story

A visit to Central Park will open your eyes. The gated community was first conceived in 2004 when Neal acquired the land, but put on hold when the market turned down, which gave Neal Communities time to redesign product for the price-sensitive market that Neal found after the meltdown.

Land planning for the 826-home Central Park community, part of the 8,500-acre master-planned community of Lakewood Ranch, was done by Canin Associates, an urban planning firm headquartered in Orlando, Fla. Central Park is divided into six villages or “parks” by lot size, product type, and price point. Neal opened eight models at Central Park in July, 2010. Today, there are 17 model homes and all are beehives of activity. (We couldn’t find a parking space when we visited the first set of models.)

The six product lines, from least to most expensive, include:

Not surprisingly, Piedmont Park leads the sales parade, with 75 sales in the first 14 months. But Neal Communities director of sales David Hunihan says all the parks are selling well. “We’ve been selling across all the product types, which is why Central Park is now the best-selling community in the Sarasota-Bradenton MSA,” Hunihan says.

You may recall Hunihan from the long-running series in the early 2000s in Professional Builder magazine called “From the Ground Up,” covering the start-up of his home building company, Fidelity Homes. Fidelity was a casualty of the recession.

David Hunihan

Hunihan has been in his current position for two and a half years. He is amazed at Pat Neal’s success. “I sat on the board of the local HBA in 2009,” he recalls. “There was no hope. I got out of the industry and was working in e-mail marketing when Pat called and asked if I’d consider working for him. Pat’s always been the best real estate developer I’ve ever seen. But now he’s become a great builder. He’s got his business model down, and this company is running like a well-oiled machine. I remember my first day here, standing outside my office and watching people running up and down the hallway. Phones were ringing. I couldn’t believe the excitement. It reminded me of The Wizard of Oz, when Dorothy steps out of her black and white world and into the Technicolor world of Oz. Pat is very market-driven. We do the right things to meet the market, and it works!”

How Pat Neal Sees the World

The big secret to Pat Neal’s success is that he owns thousands of acres of land, free and clear of debt, and he entitled all that land to the highest density allowed by law, so he is able to shift gears and downsize his product to meet the market. And he never had to deal with a lender calling a loan.

“We build houses out of cash flow,” he says now. “We have $18 million in the bank and borrowings of $2.3 million … only because I promised I would use my credit lines some.”

Neal owns land for 10,500 lots. “We have 900 lots in inventory and the rest blanks [undeveloped lots], but we are looking for more land. I will buy land to use up some of that cash,” Neal says. “We now plan to move into Collier County [Naples, Fla., market]. I have two positions under control and three more that I’m aiming for.

“We’re now building about 20 percent of the new homes in Sarasota and Manatee Counties combined, about 31 percent in Manatee alone. We have 13 model home parks and 41 total furnished models,” Neal says. To explain his desire to expand into the Naples market, he says he doesn’t want to count on pushing his market share in Sarasota and Manatee Counties any higher, but adds, “We’re going to have a fabulous September. We already have 24 net sales. The dam is now breaking. Consumer confidence is coming back. The next housing boom in Florida is right around the corner!”

Pat Neal, president of Neal Communities, poses with Lauren Acton, the company’s 8,000th home buyer during a celebration in March 2011.

Neal has a theory about why a boom is coming. “Everyone’s biological clock is ticking,” he says. “People who were 60 in 2005 postponed retirement, but now they’re 66 and getting antsy. We have homes for them in amenitized communities, priced low enough at $250,000 that they don’t have to sell a home in Cincinnati to realize their retirement dreams. Interest rates are so low, they can make this work,” he says. Neal sees America’s demographics pointing to a new Florida boom, as more and more of those Baby Boomers reach retirement age.

And Neal is not just whistling Dixie. He’s putting his money where his mouth is. Neal has more than 100 spec homes complete or under construction (all out of cash flow), so he will have product ready for visiting Boomers when Florida’s selling season begins this coming January.

Bill Lurz has been reporting on every aspect of the home-building industry since 1970. A former editor-in-chief of Canadian Building and senior editor of Professional Builder, Bill is currently editor-in-chief of AvidBuilder.com. He can be reached at bill.lurz@avidbuilder.com.