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SAN DIEGO NEWSLETTER 3rd Quarter 2014

The San Diego market remains strong in Q3 2014.  Coastal prices for lots and homes are at or near record highs.  All indications are for continued strength for the foreseeable future based on strengthening job growth and low-interest rates.

New Home Trends

San Diego County currently has 57 actively selling communities with a majority (33%) of the units being offered as attached product. Of the 21 builders in the San Diego market, Standard Pacific and Shea Homes each have 9 actively selling communities making them the most active builders. Sales per month are averaging 2.74 per development. The average price per square foot is $285. Average square feet is 2,810.

SD Newsletter New Home TrendsTo view the entire San Diego Newsletter click on the following link: San Diego Newsletter 3rd Quarter 2014

Want to receive our San Diego Newsletter every quarter?  Email Katie Spitznagel at kspitznagel@landadvisors.com to be added to the distribution list.

 

Source: David Landes, Marketing Consultant, (858) 568-7428 ext.11 and Devin Jenkins, Marketing Consultant, (858) 568-7428 ext.13

 

Master-Planned Project in the Inland Empire Marketed by LAO Makes Progress for a Year-end Close…

The Arantine Hills master-planned project in the City of Corona continues to move closer to reality. The project went under contract with The New Home Company in the 4th quarter of 2013 and is expected to close in December of this year. The New Home Company entered a joint venture with Tricon Capital Group, a Canadian real estate investment company, to provide acquisition financing and develop the community. They intend to re-plan and re-entitle the 276-acre project to include 1,300 homes, parks, and open space. They expect to break ground in 2016 to begin selling lots and new homes.

LAO is looking forward to a successful consummation of the transaction with The New Home Company and are very pleased in their efforts to develop this exciting new community in Corona.

Related links:

Wall Street Journal

The New Home Company Announces Planned Acquisition of Master Planned Community in Southern California

Press Enterprise

Corona housing development back on the drawing board

A Premier In-Fill Development Opportunity Featuring 167 Acres in Oakland Trades Hands in a Red-Hot Bay Area Land Market

May 9, 2014 (Irvine, California) – The California Division of the Land Advisors Organization is pleased to announce the closing of Oak Knoll, a premier hillside development opportunity featuring 167 acres in Oakland, California. The asset sale was brokered on behalf of LV Oak Knoll LLC, the Seller, by Terry Ruckle and Steve Reilly of the Land Advisors Organization.

Land Advisors generated 20 offers for the property, evidence of intense competition for Bay Area residential development projects.

The Oak Knoll property is unique in the market due to its ability to provide desperately-needed new single-family homes, significant natural open space, trails and parks, and direct access to Interstate 580 at Mountain Boulevard.  With its in-fill location, the Oak Knoll property is well-positioned to provide a wide range of housing options to the East Bay Area.  Oak Knoll offers one of the rarest residential development opportunities remaining in the Western United States.

For more information about Oak Knoll, please contact Terry Ruckle, Co-Founding Principal and Oak Knoll Marketing Team Lead, at truckle@landadvisors.com or Steve Reilly, Senior Marketing Consultant, at sreilly@landadvisors.com.  For more information about Land Advisors Organization, please visit http://www.landadvisors.com or contact Tom Reimers at (949) 852-8288 ext. 28.

About Land Advisors Organization:

Land Advisors Organization specializes in innovative land brokerage through deep market insight and unparalleled client relationships. With an exclusive focus on land, Land Advisors Organization integrates current comprehensive information, cutting-edge technology and geographically specialized professionals to help our clients identify and capitalize on valuable opportunities in all kinds of economic environments.  The Land Advisors Organization employs a true collaborative brokerage model with offices located throughout Arizona, California, Florida, Idaho, Nevada, New Mexico, Utah and Texas.

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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