Texas Builder Sees Opportunity In Selling Far-Flung Suburban Starter Homes
If you rent in Phoenix, Orlando, or Houston, you’ve certainly heard of LGI Homes. The Texas-based builder has probably dropped you a note: LGI sends fliers to apartment complexes within 25 miles of new housing developments.
Aggressive marketing is just part of the plan. The Wall Street Journal reports that LGI is banking on market inefficiency. The company buys land in the suburbs to build starter homes with affordable sales packages. An average LGI home costs $197,450, and can be bought without a down payment.
This year, LGI Homes is forecasting 24% growth in new developments, the fastest rate in the publicly traded U.S. home-building industry and triple the weighted average of all public builders, according to data from John Burns Real Estate Consulting in Irvine, Calif.
The downside, though, is that some buyers have cited slipshod construction, which required repairs.