Neal Communities Looking Back, Looking Ahead

Pat Neal | Neal CommunitiesSouthwest Florida – For Pat Neal, president of the Sarasota-based Neal Communities, 2009 has been a memorable year. While the Florida housing market has continued to struggle, and the economy has only recently begun to recover, Neal Communities has bucked the national trend and, amazingly, turned a profit in a time when most would consider breaking even a resounding success. In fact, not only did Mr. Neal’s company sell more homes (263) in 2009 than in the previous five years, they nearly doubled their 2008 total of 141 homes sold. This impressive surge in sales has led Neal Communities to become the number one home builder in Manatee County for the first time in over two decades, according to the recent Metrostudy Sarasota-Bradenton Residential Survey. Considering their top six competitors in the region are better financed, well-known national builders, the people of Neal Communities are understandably excited about becoming the industry leader.

To be sure, all is not well in Florida. Credit is still hard to come by, unemployment sits above ten percent, and Florida continues to have one of the highest foreclosure rates in the country, but for the first time in recent memory there is reason to be optimistic about the future – and people are starting to buy homes in Southwest Florida again. But how has Neal Communities been able to grow while others have remained stagnant? How has this home builder outsold his competition by 20% and staked a claim to a quarter of the market share while opening a new community, River Sound, and a new company, Neal Signature Pools, in less than a year?

“I’ve been in this industry for 41 years and I’ve found that this business is cyclical,” explains Neal. “The past couple of years have certainly been tough for all of us, but I am extremely proud of how our company was able to adapt to the drop in the market and adjust our business model accordingly. The most important thing a salesman can do is identify what a consumer wants and be there first, and this year we’ve done a great job of putting ourselves in a position to be successful.”

One would expect for major national builders to have substantial advantages in the marketplace during an economic downturn. Traditionally, these mammoth companies have enjoyed huge advantages in purchasing power, liquidity to buy cheap land, and have done a better job of branding their product. Meanwhile, local builders have worked the niche market, emphasizing their ties to the community and their ability to provide a more personalized home buying experience. Neal Communities has made its home – pun intended – as a hybrid of the two.

With nearly 800 local jobs affected by Neal, one can’t quite call them a small builder, but with a purchasing staff of a whopping nine people – not counting Mr. Neal himself – it becomes easy to see how they have managed to sell homes more affordably than any other local builders, while competing with the national brands.

“Our advantage has come from our ability, and willingness, to adjust to this current downturn. Most local builders were reliant on banks, and the free flow of credit, to continue to operate, while national builders liquidated assets to keep afloat. Neal Communities used our purchasing power to build and sell smaller homes, on land that we already owned, much less expensively. We’ve spent years developing relationships with local businesses and contractors and I know for a fact that we are buying lower than any of our competition, which has translated into discernable savings to the consumer.”

But it’s more than just dollars and cents.

“Aside from just making affordable homes, the thing that really makes the Neal product stand out is the work we put in to customizing a new home for its buyer. Where national brands use a cookie cutter approach with six floor plans for any lot, we closely match the homes and land to the market, which leads to more variety and customization in our homes. People are excited to come into our design studio and see the extent of which they can help them build their dream house.”

In many ways, there has never been a better time to buy a house in Southwest Florida, particularly for first time homeowners. With a confluence of low costs, low prices, low interest and high availability, and the renewal of an $8,000 tax credit from the Federal Housing Authority for first time buyers, home ownership has become an affordable option for many. To accommodate this surging market, Neal Communities did something that raised a few eyebrows in Manatee County: they opened a new community at River Sound. This brand new, gate-entry community off Caruso Road in Bradenton, complete with nature walks and dog parks, has already sold over 100 units in less than a year, and has shown no signs of slowing down.

With homes starting in the low $100s, River Sound is a perfect microcosm of the Neal Strategy.

“There are two segments of the housing market that are doing extremely well right now: first time homebuyers, and people looking to downsize. At Neal Communities, we saw the writing on the wall, and rather than continue to build big, beautiful homes that would sit vacant, we built smaller, beautiful homes that people are currently in the market to purchase. Our strategy has been all along to perfect production, while reducing production costs; ensure we continue to compete with national builders on price; and maintain our local advantage through community involvement. And we did something at River Sound that no one else did. Instead of battening down the hatches, we built a gorgeous new community that people are really responding to, and you’ve seen the results.”

Even with all of this growth in 2009, Mr. Neal is not ready to rest on his laurels. In addition to River Sound, Neal Communities is working to complete construction of Central Park, a new community that will open in July 2010 with over 800 homes. Neal also recently announced the purchase of over 60 acres of land within Country Club East in Lakewood Ranch, with construction of a new 181 home neighborhood expected to begin late this year. Meanwhile, Neal is making a concerted effort to further improve the efficiency of the production process through advances in Information Technology. The corporate office recently became one of only a handful of home builders in the area using the new, top-of-the-line NEWSTAR operating system, with the intent to be fully electronic in two years from the field.

“In order to make the cut and continue to compete with the national home builders financial structure, we are going to implement a major initiative to improve the processes of our purchasing and electronics. We are all very proud of our continued role as a major economic engine in Southwest Florida, and I am extremely excited about the things to come from Neal Communities to the benefit of our community.”

There is no disputing that 2009 has been another tough year for America, but local industry leaders like Neal Communities give us all reason to be optimistic for the promise of a new year.

Best regards,

Maryann Grgic
Public Relations Assistant
Neal Communities
8210 Lakewood Ranch Blvd.
Bradenton, FL 34202
Office: 941-328-1112
Mobile: 941-301-1929
mgrgic@nealcommunities.com