Expanding into a new market is one of the most consequential moves a regional home builder can make. The decision involves significant capital, new relationships, and a leap of faith that the market will reward the investment. Yet as the experiences of successful regional builders show, expansion is not a gamble. It is a disciplined process shaped by strategic hiring, market selection, product adaptation, and clear performance metrics. Understanding how these builders approach growth offers practical lessons for any construction firm looking to gear up for growth in new territories. This article explores the strategies that regional builders use to expand successfully, drawing on real-world examples of companies that have entered new states, acquired competitors, and built thriving operations far from their home base.
Choosing the Right Markets for Expansion
Not every growing city makes a good expansion target. Successful regional builders apply a rigorous set of criteria before committing capital to a new market.
Proximity and Logistical Range
Distance from the home office matters more than many builders initially assume. Lance Williams of Williams Homes limits new markets to locations he can reach within two hours by plane from the company base in California. This constraint ensures that senior leadership stays engaged. Bob Hawksley of The Fischer Group describes this as logistical range, a concept that governs how far centralized support systems can effectively reach.
Economic Fundamentals and Job Growth
Builders who expand successfully look for markets with strong employment bases. Landsea Homes entered Chandler, Arizona, drawn by Intel 10,000-employee campus and plans for 7,000 additional jobs, plus Allstate Insurance planned 2,500-job corporate campus. Phoenix added 86,800 jobs in 2018, a 4.2 percent gain that ranked second among all U.S. metros.
Lifestyle and Demographic Appeal
Williams Homes developed a checklist for new markets: university towns with outdoor lifestyle options and vibrant downtowns that appeal to both retiring Baby Boomers and household-forming Millennials. Bozeman, Montana, and Boise, Idaho, checked all the boxes. Truland Homes targets what CEO Charles Schetter calls midsize defensible markets along the Gulf Coast that are large enough to support growth but not so dominated by national public builders that a regional player cannot compete.
In summary, the key factors builders use to evaluate new markets include:
- Distance from the home office and ease of senior leadership travel
- Employment anchors that drive household formation and housing demand
- Lifestyle amenities that attract multiple generational buyer groups
- Level of competition from national builders in the target market
- Land availability and entitlement timelines
Building the Team for Market Entry
The single most consistent theme across every successful regional expansion is the importance of people. Builders repeatedly cite hiring, talent retention, and cultural fit as the decisive factors that determine whether a new market thrives or stalls.
Hire Leaders Who Know the Terrain
When a builder enters a market with no existing presence, it lacks local relationships with landowners, developers, real estate agents, and subcontractors. The solution is to hire management talent with established reputations and connections. Williams Homes brought in Chuck Beck, a 50-year veteran of the Bozeman market, as its construction manager for the Montana expansion. Empire Communities retained the founders of Edward Andrews Homes to continue overseeing the Atlanta market after acquisition.
Davidson Homes hired seasoned veterans Brad Nelson and Chris Smith to run new divisions in Raleigh and Nashville. CEO Adam Davidson explains: Our expansion plans have less to do with a set of cities and more to do with the people I meet in different cities who I think would be right to lead expansion there. In each new market, the company relies on the local operator relationships with real estate agents who deliver 70 percent of Davidson Homes buyers. For builders seeking to replicate this approach, finding and keeping top talent in home building requires a deliberate strategy that identifies local experts who align with the company culture.
Think Long-Term About Staffing
Short-term hiring based on initial entry size can cripple a new division. Patrick Woods of View Homes emphasizes that hiring needs must be based on the market projected size, not the initial entry volume. When Goodall Homes expanded into Knoxville, the company benefited from a management team all under 30 who had grown up in the company culture. Two years later, the division had expanded to 301 finished lots in five communities and expected to close 115 units that year.
Retaining Talent After Acquisition
Acquisitions are a fast route to market entry but carry the risk of losing key personnel. Successful builders use several retention strategies:
- Retain founders and senior managers to oversee the acquired market (Empire Communities, Edward Andrews Homes)
- Negotiate management fee contracts to keep the previous owner engaged through the transition (The Fischer Group, Dogwood Homes)
- Preserve the acquired brand identity where it has strong local recognition (View Homes, Armadillo Homes)
Adapting Product and Brand for Each Market
A home design that sells well in one region may fail in another. Successful regional builders understand that product adaptation is not optional, and brand strategy after acquisition requires careful navigation.
Right-Sizing Homes and Floor Plans
Product adaptation takes many forms. Goodall Homes builds more homes with basements in Knoxville than in Nashville, reflecting different buyer expectations. Davidson Homes built townhouses for the first time in Holly Springs and Apex, North Carolina. Williams Homes offers three-story duplexes with detached garages selling north of $1 million in Bozeman, a far cry from the single-family homes it builds in Southern California in the $600,000 range.
Truland Homes maintains consistent features across markets such as extra-high ceilings, tall windows, and open floor plans, but adjusts price points to local conditions. The mix ranges from beach homes in the $600,000s to entry-level product starting from the low $200,000s. Landsea Homes found that Phoenix allows it to differentiate with larger lot sizes that exceed most infill land plans elsewhere.
Energy Efficiency as a Differentiator
Landsea Homes delivers homes with best-in-class energy efficiency in Phoenix, a focus shaped by division president Peter Beucke experience in the solar industry. This commitment to high-performance construction creates a competitive edge in a market where many builders compete primarily on price.
Brand Strategy After Mergers and Acquisitions
One of the most debated decisions in market expansion is whether to keep the acquired brand. The options and their trade-offs are shown below:
| Strategy | Example | Best When |
|---|---|---|
| Unified brand across all markets | Davidson Homes, Landsea Homes | The parent brand has strong recognition and the acquired brand does not |
| Hybrid brand (parent plus acquired) | Armadillo, a View Homes Company | The acquired brand has excellent local reputation and strong community ties |
| Full rebrand of the acquired company | The Fischer Group rebranded Dogwood Homes to Fischer Homes | Strategic alignment requires a single market identity and consistent operations |
The right approach depends on the strength of the acquired brand and the degree of alignment between the two companies. For builders weighing this decision, market-specific branding offers a framework for competing with larger national builders while preserving local credibility.
Setting Metrics for Long-Term Success
Expanding into a new market is only the beginning. Without clear performance metrics, even the best-laid plans can drift. The most successful regional builders establish objective targets from the start.
Growth Benchmarks by Builder
Different builders set different targets based on their market position, capital structure, and growth ambitions. The table below compares the key metrics used by several regional builders that have recently expanded.
| Builder | Target | Timeline |
|---|---|---|
| Davidson Homes | 150 closings per new market | As soon as possible (NC target: 2020) |
| View Homes | 500 annual closings in San Antonio | By 2020 (two years from entry) |
| Truland Homes | 500 company-wide annual closings | By 2020 |
| The Fischer Group | 325 annual closings, Louisville | 2019 (up from 285 in 2018) |
Phased Growth and Organic Expansion
Davidson Homes follows a phased approach: once a new market reaches 150 closings, it merits full staffing. After that, the company expects organic annual growth of 20 percent. Truland Homes measures success in Florida by the time between first overhead burn and the product grand opening, targeting no longer than six months. View Homes set an ambitious target of 500 annual closings in San Antonio within two years, a goal made more achievable by the acquisition of Armadillo Homes.
Diversifying Within Existing Markets
Expansion is not always about geography. View Homes continues to grow within existing markets by introducing new product types, including a gated community in El Paso and an active-adult product in southern New Mexico. This approach allows builders to deepen their presence in familiar markets while testing new buyer segments. For builders considering this path, understanding how to scale operations for sustainable growth provides a framework for expanding without overextending.
When to Hold and When to Fold
During the last recession, View Homes came close to pulling out of southern New Mexico. The builder chose to hold on, and the bet paid off with about 100 sales per year since. The lesson is that market expansion requires patience and the willingness to ride out downturns in markets with strong long-term fundamentals.
Regional home builders that successfully expand into new markets share a common playbook. They choose markets based on economic data and logistical feasibility. They build teams around local talent with established relationships. They adapt product to local buyer preferences rather than forcing a one-size-fits-all approach. And they set clear performance metrics that allow them to measure progress and make informed decisions. These strategies are not theoretical. They come from builders who have executed expansions across the country, from Bozeman to Pensacola, from San Antonio to Chandler. The lesson for any regional builder considering expansion is that success depends less on the size of the opportunity and more on the discipline of the approach.