A homebuilder that’s opening its first Dallas-area neighborhoods isn’t looking to rack up thousands of sales. But with its homes selling for more than twice the average cost of a North Texas new house, GFO Home doesn’t have to peddle as many properties to meet its hoped-for revenue. “I’ll be happy if I have a 1% market share,” said Glenn Gehan, who wants to sell $200 million in houses this year in the hot Austin and Dallas-Fort Worth home markets. “We purposely went to the high end of the market,” Gehan said. “Our average home is $950,000.”
GFO Home Builds Gig Houses on Large Lots
“Our best-selling house is 4,400 square feet,” Gehan said. “It’s a different buyer than with most builders.” While many production homebuilders are trying to bring their costs down and maximize square footage, GFO Home is aiming at another part of the market. Gehan started the company in 2018, building first in the Austin area and now expanding to D-FW and Houston. If the name sounds familiar, he and his family at one time owned one of the largest homebuilding companies in the area, Gehan Homes. “We were closing 1,600 home sales in a year and were the 11th-largest private builder in the U.S.,” Gehan said. “Back then, our average sales price was about $350,000.”
In 2014, he and his brothers sold their company to one of the world’s largest housing producers — Japan-based Sumitomo Forestry. “It was really a good opportunity for me and my brothers, and Gehan Homes now does 3,600 houses a year,” Gehan said. “I took a year off and traveled around the world a couple of times. “But I knew when we sold Gehan Homes that I was going back into business,” he said. “My dad retired when he was in his 40s and told me it was a big mistake. I like working.”
Builder Expanding from Austin to DFW
GFO Home, which is based in Dallas, is opening models in its first three neighborhoods: the Inspiration neighborhood in Wylie, Lakeview Downs on Lake Lavon, and Enclave at Woodbridge in Sachse. The builder has sites in a half-dozen North Texas communities and is negotiating for eight more locations. “We have the lot supply to come close to $300 million in revenue next fiscal year,” Gehan said. “At a $950,000 price, you don’t have to build that many houses to get to $300 million. “One of our goals is to have the highest average sales price of a production builder in Texas.” With sales of million-dollar homes up by more than 80% this year in Dallas-Fort Worth, more builders are catering to “move up” houses for monied buyers. “Today what is considered a move up is phenomenal,” said Ted Wilson, principal with Dallas-based housing analyst Residential Strategies. “We are routinely seeing new houses sell out in the suburbs for more than $1 million. “A lot of this is coming from the relocation buyers coming in,” Wilson said. “If people keep moving here from the East and West Coast with big housing equity, the higher-priced market will do well.”
Unlike many high-end builders, GFO Home likes to put unsold products on the ground. “We start a lot of speculative houses,” Gehan said. “Probably 80% of our starts are spec, and we don’t have a buyer show up until the house is almost done. We see a lot of people from California."
GFO Home saw a lot of relocating buyers in its initial Austin neighborhoods. “Dallas was obviously the next step,” Gehan said. “In the last few months, we’ve made our first investment in Houston. “If we are building in the Dallas, Houston, and Austin markets and have a 1% market share, we can do over $1 billion a year in top-line revenue,” he said.