Buyin' Ryan: Mega-builder claims 24% of home market
Just when you thought local builders were going to get the last laugh after the first national mega-builder entering the Charlottesville market failed to sell two of its big, high-end projects, Ryan Homes has come back in a big way. According to statistics from the Charlottesville-Albemarle Association of Realtors, Ryan now builds nearly one out of four of the new homes sold in the Charlottesville area.
At a time when local stalwarts like R.D. Wade Builder and Church Hill Homes have fallen by the wayside, Ryan's 24 percent market share of all new residential construction in Charlottesville and its surrounding counties is by far the largest of any builder in the area.
How does Ryan do it? Economies of scale.
"They're like Wal-Mart," says Keith Davis, a local realtor and real estate commentator. "Since they are a big national company, building homes all over the east coast, they're able to buy their materials in bulk."
This lets Ryan, to use the the pitchman vernacular, pass the savings on to you. Davis says this approach, unprecedented in the Charlottesville area, has allowed Ryan to be wildly successful selling mid-range homes to first-time home buyers.
"With Cherry Hill in the City and Holly Hills in Greene County, I've never seen anything sell as fast as those sold," says Davis. "They hit a market nobody had reached and allowed people to live in a newly-constructed home at an affordable price."
Additionally, Ryan's keeps its overhead low by offering few customization options in any particular home. Ryan's designs are generated from the central office in Reston, and then those designs are built in multiple locations across the country.
For example, the Belvedere model, one of the homes for sale in the Holly Hill development, is a 1,998-square-foot, two-floor, four bedroom, two-and-a-half bathroom home available in the "high $270s" according to Ryan's website. That same Belvedere model is available at the Estates at Port Potomac in Woodbridge for around $330,000 and in the Villages at Urbana near Frederick, Maryland for around $370,000.
Still, while potential homebuyers get a bargain, local subcontractors lose the business.
"Ryan doesn't get their building materials locally; they don't use local labor," says Davis. "They're a self-contained operation that brings everything in from the outside."
Still, plenty of demand exists for local builders and their subcontractors. According to Davis, the reason Ryan Homes has been so successful selling budget-rate homes is the same reason that their more expensive homes have yet to achieve the same level of sales success.
"As you move up the luxury chain," says Davis, "buyers become more discriminating and they want more decision power. For instance, [Charlottesville-based] Gaffney Homes will take you down to the quarry and let you pick out the very stone that they'll use for your granite countertops. With Ryan, those countertops will probably be extra, and you get only four or five options."
Gaffney CEO Mike Gaffney did not return the Hook's call for comment, but that difference in customization options would explain why pricier developments like Ryan's dwellings in the golf-course community of Old Trail Village (in which Ryan originally bought up much of the land and sold a total of two houses), and their Kenridge development near Farmington Country Club did not command the same demand as the company's less expensive projects.
"When you're steps away from Farmington," says Davis, "homebuyers are not going to want to live in something that is mass-produced. They want something that is particular to the area and something that they can make unique to themselves."
Neither the local Ryan representative nor a national spokesperson returned the Hook's call at the time of this post.