Otay Ranch Property Sold

Moller plans 1,000 homes starting about 2016 overlooking east side of Otay Lake

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A section of property from Otay Ranch’s master-planned community — 13A — overlooking Otay Lakes in eastern Chula Vista has been sold for $21 million with up to 1,007 homes planned to start construction in about two years.

The buyer was Moller Otay Lakes Investment and the seller, Otay Village (San Diego) ASLI V. David Landes and Greg Vogel represented the seller and the buyers represented themselves.

Landes said once development details have been completed, construction can begin on both executive and workforce housing.

East of the Moller property is Village 13B, overseen by Baldwin & Sons. It is projected to include about 900 homes, a 200-room resort hotel and up to 20,000 square feet of commercial space.

Stephen Haase, Baldwin’s senior vice president for forward planning, said Village 13B likely will follow by one or two years the westerly village. Both sections are currently located in unincorporated land and require approval from the county, possibly next year.

Otay Ranch, started in the 1980s, is about half way to completion, Haase said, with about 15,000 more homes planned on several more villages.

“We know we have demand because of population and household growth,” Haase said, “but it will be more measured than in the 2000s.”

Article published April 24, 2014 by Roger Showley at U-T San Diego

http://www.utsandiego.com/news/2014/apr/24/otay-ranch-land-sale-moller/

For more information please contact David Landes at (858) 568-7428 or Greg Vogel at (480) 483-8100

Land Prices Are Not the Only Thing Rising….

Ever heard of someone saying “when things are on a roll…enjoy it while it lasts, ‘cause it never does.” Well, I guess you could apply the same logic to interest rates.

Looking at how the tear land values have been in the last 12 months, it seems things are starting to cool off and the industry is taking a collective breath.  When the Federal Reserve Chairman speaks and hints at future actions regarding interest rates, the market is clearly listening.  In case anyone missed it, interest rates have risen for the better part of 100 basis points since May causing new home sales to slow and robbing buyers of purchase power, which illustrates that the housing recovery is still fragile and changes need to be addressed delicately as we move forward.  That being said, I think home buyers are realizing that low-interest rates will not last forever and they should engage while they can.

Link: http://blogs.wsj.com/developments/2013/07/16/rising-mortgage-rates-home-builders-shrug-them-off/

Source: Ryan Long, Senior Marketing Consultant, (916) 784-3329 ext. 16

San Diego County: A Shortage of Land in a Housing Market Screaming For Inventory

You don’t have to be a whiz at Economics 101 to understand the supply and demand imbalance affecting available housing and developable land in San Diego County.  You only need to drive around town or talk to neighbors in order to understand that the County is poised to experience a crises with respect to finding available housing to meet the demand.

According to the San Diego Association of Governments, the pace of residential building permits in San Diego County over the last five years is about half of what the region now needs each year (12,000 units needed annually).  In addition, only approximately 4,300 resale homes are currently on the market within San Diego County – a four year low according to numbers from the local Realtors Association.  A six month supply of housing inventory has historically been associated with a balance in supply and demand.

Currently, there is less than a two month supply of housing inventory in San Diego County!

Building Permit Chart

The scarcity of housing supply has fueled double-digit annual increases in the median price of homes sold in San Diego County in each of the past seven months, according to Data Quick based in La Jolla.  Based upon a recent per square footage analysis from the Greater San Diego Association of Realtors, Single Family Home prices have risen 14% from a year ago and Condominium/Townhouse resale values have skyrocketed 21%.

According to Data Quick, the 19% gain in the price of homes sold in March 2013 was the highest annual gain seen since January of 2005 (a few months before the peak in home values prior to the recently past recession).

Would-be buyers active in the resale market must compete with a significant percentage of “all cash” buyers (now accounting for approximately a third of all transactions).  Thus, there is amped up demand for new homes which once represented one sale for every four to six resales.  New home sales made up only 7% of total residential home sales in San Diego County in March 2013.  The drop in market share shows that fewer homes are being constructed and fewer acres of developable land are available for builders.

Future demand for housing may only increase as unemployment eases and low interest rates (now below 4%) jump start throngs of current renters who understand that their total monthly obligations for a condominium or townhome are likely now less then the rent they are paying each month.

As a result, LAO is now seeing unprecedented demand for both entitled and un-entitled subdivision land throughout the greater San Diego Metropolitan Area.

Source: Bob McFarland, Marketing Consultant, (858) 568-7428

Bay Area – Land Prices Have Gone Through the Roof!

Since the 2011 trough in land prices, the worst markets in the Bay Area have seen a significant increase in lot prices – an average of about 44%. As the available land in the core markets has dwindled, builders have turned to the tertiary markets that were once off the radar. This trend will likely continue in areas such as the Central Valley and Monterey and Sonoma Counties. Although they may be considered unbuildable zones today, they will see a similar lot appreciation over the next few years as builders move farther out of the core to build.

Lot Price Appreciation for a 5,000 SF lot

Oakley 53.33%
Antioch 53.13%
Pittsburg 51.52%
Martinez 51.11%
Brentwood 48.57%
Livermore 46.67%
Mountain View 46.67%
Sunnyvale 46.43%
Hayward 46.15%
San Jose 45.45%
Fremont 40.00%
Hercules 37.14%
Concord 33.93%
Gilroy 33.33%
Dublin 30.00%

Source: Steve Reilly, Marketing Consultant, (925) 368-3128

NorCal – Where’s the Inventory?

I keep reading that re-sale inventory is at historic lows and there are bidding wars on the small amount of re-sales that are sprinkled throughout the marketplace. This is good news on several fronts. The first being that pricing for both new home and re-sales are rising….and quickly I might add. The second is that people who are getting back into the market for a home are being beat out by all cash, quick close investors on re-sale inventory and therefore being directed to find homes from the builders. Finally, the builders themselves are running low on ready to build lots (inventory) and scrambling to backfill the demand which equates to land prices that are skyrocketing (30%+ increases in a matter of weeks depending on the market). Let’s hope that we find a normalcy in the market so we can enjoy the bull market ride in housing and land.

Links:

http://www.calculatedriskblog.com/2013/03/analysts-increase-2013-house-price.html#uh9KivlxCKGG4QDr.99

http://www.sacbee.com/2013/03/26/5292593/bidding-wars-breaking-out-in-sacramentos.html

Source: Ryan Long, Senior Marketing Consultant, (916) 784-3329 ext. 16

New Home Sales in Santa Barbara and San Luis Obispo County Pick Up The Pace!

New Home Closings in San Luis Obispo Climb According to Newest Data, Prices Steady

Posted on: Mar 07, 2013 07:33:55 AM

In the San Luis Obispo, CA market, closings of new homes jumped year-over-year in December, and the increase was greater than November 2012. New home closings moved from 12 a year earlier to 52 after the figure moved from eight in November 2011 to 15 in November 2012.

A total of 154 new homes were sold during the 12 months that ended in December, up from 114 for the year that ended in November.

New home closings were 52 out of 420 total closings, making up 12.4%. This is up on a percentage basis from 12 of 366 a year earlier. Following a year-over-year increase in November, closings of new and existing homes also rose year-over-year in December.

Pricing and Mortgage Trends
The average per-unit price of new homes was $442,185 in December 2012, unchanged from a year ago. This came after a 5.0% decline in November from a year earlier.

Average mortgage size on new homes fell from $339,237 to $287,378. Average mortgage size on new homes went from $290,161 in November 2011 to $379,406 in November 2012. For new home closings, the percentage of the sale price that was being financed slid 11.7 percentage points year-over-year to 65.0% in December 2012. In November 2012, there was a 23.3 percentage point surge from a year earlier.

Other Market Trends
The share of new home closings made up by attached units has risen while the share belonging to single-family homes has fallen. Attached closings made up six of 52 new home closings after accounting for one of 12 a year earlier. Meanwhile, single-family homes made up 46 of 52 new home closings after making up 11 of 12 a year earlier.

The average unit size of newly sold homes fell from 2,069 square feet a year earlier to 1,767 square feet.

Foreclosures and real estate owned (REO) closings continued to drop from a year earlier in December, but did not appear to be dragging the market. Out of all existing home closings, foreclosures combined with REO closings accounted for 23.1% of closings, below 48.3% a year earlier. The percentage of existing home closings involving foreclosures dipped to 9.5% in December from 17.8% a year earlier while REO closings as a percentage of existing home closings declined to 13.6% from 30.5% a year earlier.

Source: Housing Intelligence

New Home Sales and Prices Both Increase in Santa Barbara According to Recent Data

Posted on: Mar 07, 2013 07:34:03 AM

The Santa Barbara, CA market saw a rise in new home closings in December year-over-year, and the increase was greater than November 2012. New home closings moved from six a year earlier to 40 after the figure moved from nine in November 2011 to 19 in November 2012.

A total of 192 new homes were sold during the 12 months that ended in December, up from 158 for the year that ended in November.

New home closings were 40 of the 419 total closings, up on a percentage basis from six of 429 a year earlier. Following a year-over-year rise in November, closings of new and existing homes slipped year-over-year in December.

Pricing and Mortgage Trends
The average per-unit price of new homes was $642,463 in December 2012, up from $635,250 a year ago. This followed a 34.9% decline in November from a year earlier.

Average mortgage size on new homes increased to $434,179 from $417,104 last year. It went from $353,984 to $350,950 from November 2011 to November 2012. Of the overall sale price, the percentage that was being financed rose 1.9 percentage points year-over-year to 67.6% in December 2012. This was another boost after November 2012 when there was a 28.1 percentage point rise from a year earlier.

Other Market Trends
As a share of new home closings, single-family home closings have risen from last year while the share belonging to attached units has fallen. Single-family home closings made up 39 of 40 new home closings after accounting for five of six a year earlier. Meanwhile, attached units made up one of 40 new home closings after making up one of six closings a year earlier.

Foreclosures and real estate owned (REO) closings fell in December from a year earlier, but remained a drag on the market. Together, foreclosures plus REO closings made up 30.6% of existing home closings, down from 49.6% a year earlier. The percentage of existing home closings involving foreclosures dropped to 11.3% in December from 26.0% a year earlier while REO closings as a percentage of existing home closings fell to 19.3% from 23.6% a year earlier.

Source: Housing Intelligence

Source: Matt Power, Senior Marketing Consultant, (805) 845.2660

San Diego Housing Market Continues to Rebound

While job growth is the traditional driver of new home demand, the San Diego market recovery has been spurred on by primarily a dwindling of inventory, coupled with a continuation of government sponsored low interest rates. Analysts believe unsold inventory levels will remain relatively low for at least the next 12 to 18 months giving job growth in San Diego County an opportunity to rebound completely over the next few years. The increase in jobs is expected to give “new legs” to the current inventory depleted market rebound – giving us at least a three to five year upcycle.

Like many of the past housing market upcycles, overheated demand for subdivision land in the traditional location hotbeds, such as North Coastal San Diego County, have begun to spill over into communities located further east and inland – where there is a slightly greater number of available properties for sale.

SAN MARCOS SHOWING STRONG GROWTH
Available subdivision land in North San Diego County communities, especially San Marcos, is experiencing a significant increase in demand from builders. While we saw residential subdivision land typically trading for around $200,000 a finished lot in early 2012, we are now seeing in the first quarter of 2013 lots going as high as $285,000 a finished lot.

The finished lot value for residential subdivision land in San Marcos has increased in excess of 40% over the last year!

The City of San Marcos is undergoing significant upgrades with an expanding university town with over 14,000 full time students now at California State University at San Marcos (compared to just 9,722 students in 2011), the recent opening of the new “high technology” public high scool, and the remodel of San Marcos High School. The $180 million remodel project was one of the largest high school construction projects in the State of California and now boasts higher test scores than some of the public high schools located within the prestigious school districts situated along North Coastal San Diego County (south of Oceanside). Planned development of the approximately 1,000-unit University District mixed-use master plan beginning in 2014 (to be located near the CSU Campus and 78 Freeway) and the new linear mixed-use development plans running several blocks east and west (parallel to San Marcos Boulevard and the upscale Discovery Hills single family neighborhoods), will transform much of San Marcos beyond its “poor man’s Carlsbad” traditional reputation.

AREAS TO KEEP AN EYE ON
With the present market momentum continuing its course in the near term and moving towards complete restoration of the residential real estate values lost in San Diego County during the recession, Team San Diego sees the next generation of residential subdivision land opportunities in North San Diego County also migrating up the 15 Freeway (north of Escondido) to communities such as Bonsall (with outstanding schools) and the unincorporated Pala Mesa area (with the widening of Highway 76 / Mission Road – serving as a four lane expressway connecting Interstate 5 with Interstate 15).

Source: Bob McFarland, Marketing Consultant, (858) 568-7428 ext. 12