Market Observations: So far in 2012, the West Riverside land market is seeing a limited number of finished lot transactions. The bulk of the land buyer activity is directed at unimproved land, where buyers plan to add value through the entitlement process.
2010/2011 saw a number of sales driven by bank owned REO with a typical escrow calling for a 30-day due diligence period and a 15-day close. The market has absorbed the bank REO projects and land values have remained relatively flat since Q3 of 2010. This dynamic has forced buyers to get more creative when submitting offers in an effort to minimize risk. A number of transactions in 2012 have included the seller carrying back paper on the property for 3-5 years. Since land values have remained flat, seller carry-back works because it generates a higher land value, versus the all-cash deal, and also creates a positive cash flow for the seller from the note interest.
Single Family Detached Market Updates: Homebuilders are continuing to see new home sales success in Temecula and French Valley. Average monthly sales have increased along with sales price. These are all great signs that point to the beginning of a true recovery.
A public homebuilder has closed on an unimproved parcel in Temecula that it intends to develop and build out new homes. Along the I-15 corridor, a private homebuilder has put some finished lots under contract, and is scheduled to close in 60 days.
Attached Market Updates: Land Advisors West Riverside Team just announced its latest listing: “Temecula Foothills” – 7 acres in Temecula for a proposed high density residential project (potential for ±140 multi-family for-rent or for-sale units).
Three entitlement escrows are presently in the works in Temecula. Optimism surrounding the for-rent market continues to circulate in West Riverside Market, specifically Corona and Temecula.
Source: Mitch Casillas, Marketing Consultant, (949) 852-8288 ext. 23