Monthly Archives: December 2011

D.R. Horton Hears a Who

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While many of the public homebuilders are sitting on the land-buying sidelines this quarter, D.R. Horton hears the call to purchase more land!

Land is scarce in the fictional city of “Whoville” so the D.R. Horton team has taken to several cities in the Inland Empire, and recently closed on transactions in both Eastvale and Chino. 

The Eastvale site consisted of 173 entitled lots just west of the I-15 Freeway. 

Following the mantra of the 1954 book with a similar name, “a deal is a deal no matter how small,” D.R. Horton closed on 43 finished lots in the College Park master planned community. 

In addition, in the first quarter of 2011 Land Advisors assisted D.R. Horton in the acquisition of 53 lots adjacent to California State University – San Bernardino.

2011 TEAM “SB” YEAR IN REVIEW: 

Despite a sluggish market, the San Bernardino Team (Doug Jorritsma & Winn Galloway) participated in several transactions totaling more than $84 million in 2011.  The majority (57%) of transactions was conventional sales; REO’s only accounted for approximately 36% of all transactions.  The Team anticipates the number of REO’s to decline moving into 2012, as many troubled assets have already worked their way through the market. 

On the Buyer side, private investors lead the way totaling 36% of all San Bernardino Team transactions in 2011.  Of the last five transactions, four were purchased by private investors looking for unimproved land for long term hold.   

Echoing the sentiments of the mayor of “Whoville,” “We are here” at Land Advisors to help you with your land needs in 2012.  Merry Christmas and a Happy New Year!

Source: Doug Jorritsma, Senior Marketing Consultant, (949) 852-8288 x13 and Winn Galloway, Senior Marketing Consultant, (949) 852-8288 x27

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Strike a Pose. Condos are Back in Vogue in San Diego County

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After seeing a huge boom in urban condominium development in the early to mid-2000’s, followed by a few years of hibernation, several suburban multi-family condominium projects are finally emerging in the marketplace, and several more are planned for actual development.  The combination of affordability and ideal infill locations is putting condominiums back on the radar screen for possible new home buyers.

Nearly every local builder has a current project in the works, either attached or detached product types.

  • Carlsbad is a hotspot for new home projects.  Shea Homes, Taylor Morrison, CityVentures and Brookfield Homes all have new communities breaking ground in the coming months, and D.R. Horton (53 Melrose), KB Home (Avellino) and Brookfield (Sago at the Foothills) are building out existing projects in this city.
  • San Marcos is also seeing an uptick of activity.  Colrich is starting to market their new project (Solaire) in the Old Creek master plan, and Lennar is building out Belmont at the top of San Elijo Hills.
  • Farther south, Davidson Communities is breaking ground on their new detached condominium site, (Arista) at The Crosby.
  • Shea Homes is also making news in Mission Valley with its new communities in the Civita master plan.

The communities of Otay Ranch and Olympic Pointe in Chula Vista will supply the San Diego South Bay with new product in the near term.

Future projects in North County, Mid County and South Bay currently in the planning stages ensure that condominiums will continue to supply lower priced homes throughout the region.

Source: David Landes, Marketing Consultant, (858) 568-7428

The Metro Gold Line: a Developer’s Gold Mine

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This summer, the Construction Authority awarded the Kiewit Parsons Joint Venture, a $486 million dollar contract to complete the Pasadena to Azusa Gold Line extension project.  Phase 2A is slated to be completed in early 2015, with service running from Downtown Los Angeles to Azusa.  The project will create new Gold Line stations in Arcadia, Monrovia, Duarte, Irwindale, West Azusa and East Azusa.  Each city along the Gold Line intends to utilize these new stations to enhance residential, retail and mixed-use developments within walking distance of each station. 

The goal of these Transit Oriented Developments (TOD) is to increase the use of public transportation, decrease the effects of sprawl and create a more sustainable way of living.  TODs generally extend out a quarter to a half-mile from a transit station.  The existing development around many of the proposed stations lack density and will allow for the acquisition and entitlement of many parcels for a more dense uses. 

Why is this important?

The San Gabriel Valley is one of the strongest real estate sub-markets in all of California.  The area boasts several examples of successful projects built during the last few years that have exceeded sales expectations.  This includes Pulte Homes’s Rosecrest Lane project that averaged sales over $800,000 per home in Pasadena in 2010-2011. 

Recent land acquisitions, including a 5.4-acre industrial site in Monrovia that is now planned for mixed-use, show the propensity of buyers and developers for both traditional and transit-oriented areas of the San Gabriel Valley.  With densities expected to double in close proximity to a number of these stations, an estimated increase of 100 to 300 residential units will be needed to satisfy renter and buyer demand at each station. 

The Los Angeles Infill team is closely monitoring the Gold Line extension, and can answer any questions builders and investors may have in regards to preparing for the “gold rush.”  For more news and events related to the Gold Line, check out www.foothillextension.org.

Source: Chris Gomez-Ortigoza, Marketing Consultant, (626) 376-9840 x14

Winds of Opportunity Skipping over the Antelope Valley

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Private investors are taking a cautious approach to buying land in the Antelope Valley.  Home sales are still slow and homebuilders are scarce. 

KB Home is still the most aggressive buyer of finished lot opportunities in Lancaster and Palmdale.  The public homebuilder has captured the Antelope Valley sub-market to the detriment of other public homebuilders. 

The Antelope Valley is the most affordable area of Los Angeles County, and KB Home is taking advantage of record low land values by scooping up several finished or semi-finished land deals.  The homebuilder has always believed in the profit potential of this sub-market and is now reaping the rewards of beating out the competition in land acquisition.

The Land Advisors High Desert Team (Michel Faris & Randy Coe) recently facilitated the closing of two transactions where KB Home purchased semi-finished residential lots in Lancaster.

The homebuilder completed its assemblage with the purchase of additional semi-finished lots within The Reserve for a total ownership of 37 lots.

KB Home also purchased 18 additional single family lots in semi-finished condition in the Sandstarr West community located on the southeast corner of Avenue K-8 and 27th Street West.

Other High Desert investors are waiting for home sales to pick up in the windy Antelope Valley, in addition to the emergence of more finished lot opportunities.  Until the sub-market begins to see signs of a broader economic rebound and improved home sales, performance is going to continue to blow right by.

Source: Michel Faris, Marketing Consultant, (949) 852-8288 x14

Homes Sales jump in Santa Clarita Valley

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Sales of existing single family homes in the Santa Clarita Valley (SCV) jumped a whopping 22.2% in October, while the overall California home sale market increased by only 3.1%. Existing home sales rose by 7.3% and condo sales rose by 28.8% from September to October in the SCV.

As parts of the SCV are nicknamed “Awesometown,” this suburban region just north of the Los Angeles Basin is a highly desirable place to live. With homes more affordable than ever and record low interest rates on home loans, the local SCV single family home market is performing better than the San Fernando Valley, where the median price of homes that sold last month was $350,000.  

Multi-family construction is up throughout L.A. County.  However, permits for single family housing still rule the Santa Clarita Valley. Single-family construction has historically been more consistent than multi-family projects.

Very few distressed/bank owned residential land assets are currently available for sale in the Santa Clarita Valley.

Source: Michel Faris, Marketing Consultant, (949) 852-8288 x14