15 Builders Making Bank in America’s Most Affluent Towns

Where are America’s highest earners? Expensive downtown neighborhoods in dense cities are logical places to look for wealth, but the highest percentage of households earning more than $100,000 per year are concentrated in small suburbs, according to a recent Census data analysis by NerdWallet. Communities on the outskirts of big metros in California and Texas make up the bulk of the top 10 most affluent towns. Among the top 10 towns, a mash-up of big builders and regional custom home builders lead the revenue market share, showing there’s opportunity big builders to build and market expensive homes in small, wealthy suburbs.

Prices in all top 10 affluent towns are rising, half of them with median new home closing prices deep into seven figures last year. Toll Brothers and Lennar are the only two public builders to lead in any of the towns by closings from 2012 through 2014, illustrating a lean toward custom homes and local in these high-income markets. While some smaller towns that make the top 10 have very few new home closings recorded at all, nine out of the 10 communities saw an increase in new home closings between 2013 and 2014. Sammamish, Washington is the only exception.

Sammamish leads the country in concentration of six figure incomes with 73.70% of households earning at least $100,000 and more than a quarter earning more than $200,000 according to NerdWallet. Although new home closings dipped slightly in 2014 from 239 to 197, the median price went up more than $100,000.

Looking at the top 10 towns together, there are a few builders reaping the benefits of high price point demand in these small pockets of above average income. A total of 15 local, regional, and national builders hold onto at least 2% of the market share by revenue across all top 10 affluent towns and closed at least 30 new homes in the last three years. Despite their only being located in Sammamish, Murray Franklyn Companies makes up more than 10% of the revenue market share among all of them and has closed the most new homes in the last three years at a median price over $800,000. Toll Brothers, with a presence in the Texas towns and Sammamish, approaches 10% of the revenue market share with a much lower median closing price slightly north of a half million. Lennar, K Hovnanian, Pulte Group, and DR Horton are the other public builders with a presence in at least one of the top 10 most affluent towns. Otherwise, regional and local builders have an opportunity here to cater to the demand of many luxury buyers.

In an economic climate that proposes a changing landscape of the entry-level buyer, suburban density of six figure incomes are an area of opportunity where big builders are not center stage. Lennar closed homes in these a few of these communities that put a three-year median closing price in seven figures when the national median for Lennar is only $272,000. DR Horton done similarly well, with median closing price among the most affluent communities at $821,100 for the last three years compared to median $226,300 nationally. While seeking product diversity that is specific to the demographics of a particular area is a no brainer, suburbs like these are prime candidates for high-end homes from production builders, even beyond Toll.

The top 15 builders make up more than half of the revenue market share across the top 10 affluent towns from 2012 through 2014 without a single median closing price under $400,000. Just 1,164 new homes were closed among the top 15 showing the powerful revenue share from just a small number of sales. While builders await more millennial subdivision traffic, there’s ample opportunity for pockets of big payouts in small towns where quality still beats quantity.