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Category Archives: Central California
FRESNO: Fat Tuesday, Skinny Inventory
Now is the time for homebuilders to open their stalled legacy projects. Beazer Homes recently closed out The Groves at Sunnyside Point, their neighborhood adjacent to KB Home’s Olive Lane new home community located in Sunnyside Fresno. New homebuilders will not have to compete as hard for new home buyers shopping the area.
HOME PRICES
According to the California Association of Realtors, Fresno County home prices increased 15.3%, but sales were down 22.2% from the previous year. Madera County saw prices increase 36.1%, but sales were down 24.4% from the previous year. However, sales are looking up with a 19.2% increase in sales from the previous month in Madera County.
| December 2012 County Sales and Price Activity | |||||||
|
Median Sold Price of Existing Single-Family Homes |
# of Sales |
||||||
| County |
12-Dec |
12-Nov |
11-Dec |
MTM% Chg |
YTY% Chg |
MTM% Chg |
YTY% Chg |
| Fresno |
$157,620 |
$148,240 |
$136,740 |
6.3% |
15.3% |
-2.5% |
-22.2% |
| Madera |
$144,290 |
$113,330 |
$106,000 |
27.3% |
36.1% |
19.2% |
-24.4% |
Source: California Association of Realtors
UNSOLD INVENTORY & TIME ON MARKET
According to Land Advisors Organization research, unsold inventory in Fresno County decreased 7.3% from the previous year and Madera County decreased 47.4% from the previous year. The median time on market decreased 24.1% in Fresno County and increased 25.4% in Madera County from the previous year.
| December 2012 County Unsold Inventory and Time on Market | ||||||
|
Unsold Inventory Index |
Median Time on Market |
|||||
| County |
12-Dec |
12-Nov |
11-Dec |
12-Dec |
12-Nov |
11-Dec |
| Fresno |
3.8 Months |
4.2 Months |
4.1 Months |
26.4 Days |
26.3 Days |
34.8 Days |
| Madera |
2 Months |
3.2 Months |
3.8 Months |
64.6 Days |
27.9 Days |
51.5 Days |
Source: California Association of Realtors
FINISHED LOT INVENTORY
Home Buyer demand is escalating fast. Quality resale inventory is sparse. If you own 10 or more acres of land in the path of development, you should be at the City processing a subdivision map faster than Mardi Gras beads flying from a balcony overlooking Bourbon Street. If you are not familiar with the entitlement process please contact me so I can help get you started.
NEW DEVELOPMENT
Fresno developers plan medical campus at Millerton Lake. FULL STORY
Source: Mark Utman, Marketing Consultant, (559) 549-6326
California Division: 2012 Year in Review
Source: Tom Reimers, President, (949) 852-8288 x28
Fresno County Approved TTM Lots Going Once, Twice…
Land Advisors Organization is pleased to say SHOUT! the handful of approved tentative tract maps (TTM) available for sale within Clovis’ city limits have been receiving multiple offers. The City of Fresno is next to follow where lots previously located in “B” and “C” locations are quickly becoming the new “A” lots. The time is now for developers and homebuilders to pounce on every reasonably priced TTM. Call LAO’s Fresno office at (559) 549-6326 for a current list of available inventory.
HOME SALES:
- Distressed homes sales are on the decline. FULL STORY
- Home prices are up 18% from a year ago. FULL STORY
NEW DEVELOPMENTS: On November 7, 2012 The Madera County Board of Supervisors re-approved 4-0 the 1,656-acre, 5,190-home Tesoro Viejo planned urban community proposed by McCaffrey Group.
Source: Mark Utman, Marketing Consultant, (559) 549-6326
Central Valley: So Yer Sayin’ There’s A Chance…
Mixed signals are making it quite difficult to predict where the Kern County residential real estate market is headed in the months to come. Recent headlines from The Bakersfield Californian include:
- “Bakersfield home prices dip inexplicably”
- “As rate of home ownership falls, some worry”
- “Bakersfield apartments filling up fast”
Then on the flip-side, there’s “Region leads nation in construction job growth.” Hmmm…
New home sales continue to make up a small part of total sales throughout Kern County and beyond at roughly 6%, according to Hanley Wood. However, it is clear that well located projects with excess finished lot inventory are now appealing to both local and national builders up and down the 99 Corridor (CA SR 99).
The main issue at hand still remains… Although new home sales appear to be picking up, foreclosures and REO’s still make up over 50% of sales, and in many cases, homes are selling for just over $100/Sq. Ft. (Hanley Wood). Many “broken” projects were purchased by investors during the downturn, yet residential lots are still trading at or below replacement cost.
As a consequence, some investors are forced to sell their investments at a loss, or wait until home prices raise so residual lot values eventually increase.
As with every storm, there is a silver lining. Construction jobs in Bakersfield have recently increased dramatically. The Bakersfield Metro area added a higher percentage of new construction jobs over the past year than any other market in the United States according to an Arlington, VA trade group. Federal funding from the Thomas Roads Improvement Program and the American Recovery and Reinvestment Act, along with various Health Care industry expansions and upgrade projects are the main contributors to this growth.
In addition, according to Richard Chapman of the Kern County Economic Development Corp., local growth in the manufacturing, warehouse, and distribution sectors has also spurred along recent construction. Growth and improvement in these areas are so critical as Bakersfield continues its quest to becoming a more dynamic and diverse economy.
Hanley Wood recently ranked Fresno County (#4) and Kern County (#6) in its list of Top Ten California Counties with the highest new home sale projections for 2012. Land Advisors is asking, “Is this a sustainable positive upward move or just another head-fake?”
Source: Jason Hepp, Senior Marketing Consultant, (661) 702-9080
Fresno, Spring in its Step?
This winter, Fresno homebuyer traffic is the best we’ve seen in 2+ years! Could it be due to Fresno’s declining unemployment rate? Or, perhaps it’s the dry warm weather this season? Either way, homebuilders active in the Fresno marketplace right now are welcoming the new interest from homebuyers with open arms as the spring selling season begins full bloom.
Median new home base prices are hovering around $110 per square foot, which is $60 per square less than peak values in 2006.
News You Can Use from the Fresno/Clovis Submarket…
Valley Builders Optimistic In Spite Of Housing Market: Despite a sea of foreclosures and bargain-priced houses for sale across the central San Joaquin Valley, homebuilders are still finding a reason to raise the walls and roofs on new homes… MORE
More on the Activity in Fresno’s New Home Market: New home construction seems to be on an upswing in neighborhoods across the Valley. And builders are optimistic that the market is starting to turn. (This week’s) story in The Bee tells you what some Fresno homebuilders have done to get through the downturn and who is buying new, but it doesn’t cover everyone.
Here’s a look at what other builders in town have done to attract buyers along with more from homebuyers that we couldn’t squeeze into the final story… READ ON
Clovis City Council Oks Map Laying Out City’s Future: A plan that lays out the future neighborhoods of Clovis was approved Monday (2/13) night by the City Council, despite fears from some rural residents that it won’t adequately protect their land from urban intrusion. …Rural residents who live on large lots east of the city say a proposed open-space buffer of 100 feet is not wide enough to shield their homes from the housing tracts of smaller-lot homes that would be allowed under the new general plan… READ ON or, WATCH VIDEO via KFSN.
California’s High-Speed Rail Project Continues despite Criticism: California’s high-speed rail project is already projected to take longer and be more costly than originally projected, but the obstacles facing it are not yet over. Governor Jerry Brown is trying to push the project through the Legislature this year, though… MORE
Source: Mark Utman, Marketing Consultant, (559) 449-4500
Santa Maria… Where are the builders?
A few weeks ago, the City of Santa Maria, Community Development Department (CDD) released its list of residential projects in the development process with the number of building permits issued by the City from July 1, 2011 through December 31, 2011.
As you can see from the chart below, the Santa Maria CDD shows there are 669 future single family dwelling units and 633 multifamily condominium units that are either approved or pending approval, for future development.
One new home community by the Towbes Group is actively selling new single family homes with floor plans ranging in size from 1,208 to 2,043 square feet. “Lavigna” is a well-amenitized gated community with a pool and recreational area.
To date, Lavigna is the only new home product currently available within the City of Santa Maria. But even with Lavigna, the ample lot inventory indicates that Santa Maria still has room for another builder.
This leaves us scratching our heads…. When are all these units going to be built? And who is going to build them?
Other News from the Central Coast
Via TheBusinessJournal.com: Visalia-based Mangano Homes, Inc. is developing the mixed-use Marsh Street Commons project in the heart of San Luis Obispo. Though the recession took a toll on the San Luis Obispo market as it did in the Valley, the Central Coast town has shown a certain tenacity in the past. Read complete article.
Via RENTV.com: The Village at Broad Street Family Apartments, a new 42-unit affordable housing project in San Luis Obispo, just celebrated its grand opening to the public. Developed by ROEM Corporation, the project is located at 2240 Emily St. Read complete article.
The Village at Broad Street also recently held its grand opening for the new Fresh & Easy Neighborhood Market which turned out to be a huge success.
Source: Matt Power, Senior Marketing Consultant, (805) 845-2660
Central Valley Housing Market on the Mend?
Home sales are typically slow everywhere in December but some markets in the Central Valley showed signs of life at the end of 2011. According to Affiliated Appraisers, the median sale price for existing single family homes in the Bakersfield area was $132,000 in December 2011, up 9.6% over December 2010. The supply of active listings of homes for sale dropped 9.3%. Foreclosures continue to significantly weigh on the market as bank-owned property accounted for roughly a third of the homes sold in 2011.
Investors for single family homes, who buy property to rent to tenants, are returning to the Central Valley, and made up roughly a third of home sales in 2011. Some successful investors were able to “flip” property for a profit. Affiliated Appraisers reported that 23 homes were “flipped” in the Bakersfield area since April 23 of 2011.
Home prices have fallen a whopping 56% from the peak in June 2006 (current median home price is $131,500). As long as banks do not flood the market with distressed product, home prices should remain somewhat stable in the coming months.
As a consequence to uncertainty in traditional financial investments like stocks and bonds, Central Valley investors have now turned to existing multi-family buildings. As banks continue to work through their single family detached REO inventory, this seems like a logical place to deploy capital. Occupancy rates are hovering around 90% for even for C and D level properties. The Bakersfield area market had over 160 multi-family residential sales transactions in 2011. However, it still makes little sense to develop new multi-family land at this point, as direct costs and fees are prohibitive.
Source: Jason Hepp, Senior Marketing Consultant, (661) 702-9080 ext. 14
Giddy Up Fresno!
Hold on to your hat… New homebuilders who have lot inventory in the Fresno sub-market are now building again! Fresno construction starts are UP since the same time last year.
Major Player: Lennar Homes – Fresno and Clovis combined saw 219 new construction starts in the last quarter of 2011, (4Q 2010 saw only 161 starts). Lennar Homes led the way with the most starts of any builder with 43. Wilson Homes and Bonadelle Neighborhoods came in a distant second and third with 27 and 26 starts, respectively. The most active sub-market in 4Q 2011 was Clovis South with 66 starts (up from 44 starts in 4Q 2010).
Lennar also controls the most lot inventory of any builder in Fresno. Of the 2,425 total vacant finished lots in the Fresno sub-market, 296 (12%) are owned by the public homebuilder as of January 2012.
Project of Note – Bonadelle’s Bella Vista at Brighton is seeing impressive sales in its early phases. The project’s success is breathing new life into the Millerton area sub-market as the first phase of the Brighton Master Plan. The area boasts a ton of amenities including its location… a stones’ throw from Millerton Lake & Marina, Eagle Springs Golf & Country Club, and Table Mountain Casino. With a natural setting and amenity package that is unrivaled in the greater Fresno area, Bonadelle is seeing buyers come out and purchase as a lifestyle choice and value play to living ‘in town.’ The Fresno Office of the Land Advisors Organization can bring you up to speed on this up-and-coming sub-market.
Home Prices – The latest data from Fiserv Case Shiller shows that national home prices are expected to grow at an annualized rate of 3.2% between 2011 and Q2 2016. BusinessInsider.com combed through Fiserv’s data and picked the best housing markets for the next five years… Madera ranks No. 3 out of 15 on the list with anticipated annualized growth from 2011 – 2016 of +10.4%.
Multi-family – New high-end apartments finally return to Fresno with an apartment complex called The Shires. The Penstar Group, a real estate development and construction company in Fresno, recently broke ground on the project and is looking to accommodate pent-up demand now that local rent rates have leveled off.
New Office Location! – The Land Advisors’ Fresno office has relocated to 759 W. Alluvial Avenue, Suite 103, Fresno, CA 93711. The new office phone number is: (559) 549-6326. Stop by and say Hello!
Source: Mark Utman, Marketing Consultant, mobile: (949) 533-8284
Two Steps Forward, One Step Back on the Central Coast…
As the New Year begins, the California Central Coast is preparing for homebuilding activity in some areas, and inactivity in others. The good news is that this sub-market will see two new home communities open this year.
The first to open is Lagunitas, in the quaint beach side town of Carpinteria, one of south Santa Barbara County’s most desirable areas. Lagunitas is located adjacent to the north side of Highway 101 and is within close proximity to the beach and shopping opportunities. The master plan will offer three different product types, ranging from 1,360 to 2,421 sq. ft., aimed at appealing to a wide range of home buyers. Private homebuilder MD2 Communities has already broken ground and is currently forming an interest list.
The second new home community opening in 2012 along the Central Coast is the first component of the Margarita Specific Plan in the City of San Luis Obispo. MD2 Communities will bring 177 single family homes, an affordable housing site and 16 small-scale commercial opportunities to fruition. The new homes are planned to range from approximately 1,500 to 2,000 sq. ft., with the majority of the product types consisting of single story plans. Model homes should be completed in the first quarter of 2012.
Other parts of the Central Coast are not seeing as much forward progress. In September, Goleta’s City Council rejected a zoning change for the controversial Bishop Ranch housing project. Bishop Ranch was initially proposed for 1,200 homes, 90,000 feet of commercial space and 67 acres of park land, but the developer withdrew the application at the last minute. The second attempt with the City, which was unanimously rejected, was a request for the zoning designation to be changed from Agricultural to Mixed Use Urban. Either way, it looks like the plans for Bishop Ranch are one step back for the moment.
Overall, the Central Coast in 2012 will provide superb opportunities for homebuilders, developers and investors to pick up strategic land positions in a traditionally supply-constrained market in anticipation of what is broadly expected to be a rising new home market in the next few years.
Source: Matt Power, Senior Marketing Consultant, (805) 845-2660
The American Dream… Renting in the Central Valley?
As the Central Valley land and homebuilding market continues to slog through foreclosures, short sales, and tepid new home sales, many potential homebuyers are waiting out the current real estate cycle until real signs of economic growth emerge.
- According to Affiliated Appraisers, the median sale price of a single family home in Kern County rose 0.8% to $132,000 from September to October this year, but decreased by 2.2% year over year.
- The number of foreclosures dropped 9.9% from September to October of this year, and is down 36.1% since October 2010.
- October saw 522 closed homes sales (new and resale) throughout the County, down 11.4% for the month and off 7.1% for the year.
- Properties owned by lenders account for 40.5% of all sales compared with a national average of 30.1%.
Due to the lack of confidence in the economy and homebuilding market, many would-be homebuyers are now turning to renting instead of buying. According to RealFacts, many potential buyers with good credit who can afford to purchase a home now are electing to wait on the sidelines, and rent an apartment or townhome for a while instead.
Indicative of demand, average monthly rent in Kern County rose 2.8% in the third quarter 2011. The County had the 16th highest rent of 24 metropolitan statistical areas in California. Its 98% occupancy rate earned it the State’s No. 4 spot on occupancy. Over the last 3 quarters, rent for two-bedroom townhomes in Kern County increased by 10.7% compared to the previous three quarters.
Kern County is following a pattern typical of inland communities and other tertiary markets… They tend to be the first to collapse and the last to recover.
Source: Jason Hepp, Senior Marketing Consultant, (661) 702-9080 x14
1.21 Gigawatts?! Trying to Get Back to the Future in Fresno…
It seems as though the Fresno residential land market is revisiting its past… residential raw land is currently selling for prices paid back in 2000. During the market peak five or six years ago, unimproved vacant land in “A” locations sold in Fresno for $300,000 per acre. Today it’s going for prices ranging from $60,000 to $85,000 per acre.
Local homebuilders are in the early stages of reloading their land inventory. Housing Capital is playing a huge part, as the lender is one of a few banks enthusiastic to offer A, D and C loans.
Recent Land Deal: Homebuilders are buying un-entitled dirt again but in smaller bites. A local builder just purchased 10 acres of unimproved land in the heart of northeastern Fresno.
Fresno local homebuilder Granville Homes is knocking the dust off of Westlake, a master planned community in west central Fresno that has been “mothballed” for the last five years. The 430-acre project is now scheduled to break ground sometime in 2012. Westlake is a promising master plan by a talented local builder. This could spur a land rush from builders and developers alike looking to ride the coattails of this new community now anchoring West Fresno.
According to Fiserv, a financial analytics company, Madera is on the mend… Fiserv identified Madera (about 25 miles northwest of Fresno) as a “winner” in a long list of sub-markets around the U.S. in terms of housing valuations. The Chicago Tribune article states that home values across the Nation are anticipated to decrease in the coming year, but that home values in the Madera area will gain 15.5%!
Fresh from the FresnoBee.com News Blog… the number of foreclosures in the Central Valley fell during the third quarter of this year compared to the same time a year ago. However, building permits are way down. In Fresno, only 19 single-family permits were pulled in September compared to 113 in August, and 120 permits a year ago at the same time. …Adapting to changing demographics and consumers’ needs, Lennar Homes rolls out a new model in the Central Valley.
So, despite Fresno residential land values resetting to decade lows, Land Advisors is looking to blast a few gigawatts into the market with two large Fresno area listings in early November – stay tuned!
Source: Mark Utman, Marketing Consultant, (559) 449-4500
Who’s Buying Lots in the South Central Valley? Locals, That’s Who!
There’s an old saying that a land market bottom (or other markets for that matter) is defined at least in part by an absence of bona fide buyers. And while it has certainly seemed that way recently as the land market has been pretty quiet in the second half of the year, an interesting pattern is starting to emerge in California’s Central Valley. Local investors, developers, and builders are judiciously re-entering the market and purchasing lots! Some of these buyers are the same groups that sold out at the peak of the market, and are pocketing nice profits.
The perceived notion that the sky is falling and things will never get better is running rampant and some local buyers with the right long-term perspective are taking action now.
Source: Jason Hepp, Senior Marketing Consultant, (661) 702-9080 x14
Big Waves in the Central Coast
Just south of San Luis Obispo, along Central California’s picturesque coastline, lies the area known as the “Five Cities,” which includes the Cities of Arroyo Grande, Pismo Beach, Grover Beach, Oceano and Shell Beach. Wedged between the beach and Highway 101, this area is one of the most desirable and highly sought after among Central Coast homeowners. However, it is also extremely supply constrained in terms of residential land and new home inventory. Even though the Five Cities area does currently have a good amount of commercially zoned land, residential land opportunities have been harder to come by.
Five Cities Residential Lot Inventory (as of 2nd Quarter, 2011)*:
- Vacant Developed Lots (Detached Product) = 200
- Vacant Developed Lots (Attached Product) = 15
- Future Lot Supply (Detached Product) = 406
- Future Lot Supply (Attached Product) = 246
*Source: Metrostudy (Q2 ’11) and Land Advisors Organization Research
Source: Matt Power, Senior Marketing Consultant, (805) 845-2660
Fresno?… Fres-YES! Permits, Pigskins & Progress
- New home sales in Fresno and Madera Counties are still slumping www.ksee24.com
- City of Fresno & City of Clovis together have 2,200 vacant finished lots.
- Central San Joaquin Valley Single Family Permits pulled YTD = about 760
- Foreclosures are down – www.thebusinessjournal.com
- Fresno County unemployment is still hovering around 17%
- One public homebuilder made the most notable lot purchase in 2011 – $85,000 per finished lot in a highly desirable area of Clovis
- This month, the City of Sanger (15 minutes west of Fresno) eliminates development fees for new home construction. www.ksee24.com
- 3Q 2011 – Land Advisors sold 17 acres in Clovis and 112 partially improved lots in Fresno. Both were bank REO transactions.
- Although many REOs sold to investors in 2011, there are still opportunities for investors to buy distressed lots/land.
- Earlier this year Bonadelle Neighborhoods broke ground on the Brighton Master Plan. The first neighborhood will have 161 lots. First home closing is scheduled around Thanksgiving.
- This summer Wilson Homes began construction on Herndon Avenue, building their new plan called “elev8ions” elev8ions.com
- Last Saturday Fresno State Bulldogs traveled to Cal Berkeley… unfortunately the “Dogs” lost 36-21. Next game is this Saturday at Nebraska.
Source: Mark Utman, Marketing Consultant (559) 449-4500 x127
South Central Valley: “Hold on Tight!”
2011 began with renewed optimism that California’s Central Valley residential land market would improve and home sale prices would begin to stabilize. As Q2 rolled around it became evident this optimism may be short-lived.
In 2011 the Central Valley sub-market (including Kern, Kings, Madera, and Tulare Counties) has seen a slight decrease in foreclosure and REO sales (currently at 32% and 28% respectively); yet new home sales continue to lag far behind at a little over 5% of total sales.
Tertiary markets (including the cities of Arvin, McFarland and Wasco) which traditionally attract builders who utilize government subsidies for potential home buyers are experiencing extended wait periods, or are unable to obtain financing altogether.
Most public homebuilders and larger regional builders have left the valley or “shelved” their projects until the market shows real signs of recovery.
However, there are investors and developers with long-term horizons looking for land/lot opportunities and have been successful in closing transactions throughout the South Central Valley.
Source: Jason Hepp, Senior Marketing Consultant, (661) 702-9080 x14
Central Coast: SLO at the Top of Land Wish Lists
California’s Central Coast is seeing an uptick in investment and development activity as developers and builders find pockets of opportunity with residential land projects emerging from distressed situations. Notorious for its high barriers to entry, the Central Coast sub-markets in Santa Barbara, San Luis Obispo and Monterey Counties remain supply-constrained.
Several newly acquired land projects have either broken or are breaking ground in the coastal towns of Carpinteria and Santa Barbara, while a robust student-housing and rental market keeps San Luis Obispo (SLO) at the top of land wish lists. These projects will bring the first new home product to this sub-market in several years.
Other markets from Paso Robles to Salinas continue to attract investment attention as well.
Source: Matt Power, Senior Marketing Consultant for California’s Central Coast sub-market. For more information on land activity in this area, you can reach Matt at Land Advisors’ Santa Barbara Office at (805) 845-2660.
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