Bay Area: Back to the future—Are condos the new apartments???

I have to admit it…I was dead wrong. I thought (like many others) that condos were going to be dead for a while.  Many people really don’t want to live in a condo but they end up “settling” for them because of the relative affordability closer to job bases. As prices in the Bay Area have resumed their pre-collapse march up at 10+% per year, condos are making resurgence.

Given the resurgence in attached for-sale product in the Bay Area, the “highest and best” use has now probably switched back to condos from apartments.  And it probably won’t be long before we see the reverse of what happened a few years ago where condo sites were re-entitled to apartment deals.  Now we’ll start seeing apartment sites re-entitled to townhomes and condos. If you have one of these sites feel free to give us a call to help evaluate all the options in the fast changing market.  There are many factors to consider in making this kind of decision; our in-fill experts can help you juggle all the factors to position your site for maximum sales proceeds!

http://www.contracostatimes.com/business/ci_22613042/bay-area-condos-tight-supply-has-buyers-scrambling.html

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

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Warm Weather and Hot Rents in LA

As we begin to approach the fall, you can bet the weather will cool down but the apartment market will continue its hot streak. The Los Angeles Infill Team has been paying close attention to apartment rental trends and has seen favorable signs for continued rent growth.

Apartment rental rates in Los Angeles continued on their strong path of growth as seen in year-over-year data in the second quarter 2012. Average rents for all types of rental units increased 5.3%. The biggest surprise may be the average YOY growth seen in both two and three bedroom townhome units. Rents in two bedroom townhome units increased an average of 13.8%, while rents in three bedroom townhome units increased 17.2%. Townhome and three bedroom units have seen a large boost in pricing as many families displaced by foreclosure try to find units large enough to accommodate them. Several buyers, including investors and developers, are paying close attention to these statistics and are pushing to purchase properties with the ability to build and rent townhomes then convert them to condominiums as the for-sale market improves. Average occupancy rates have continued to tick upwards and touched 95.5% in Q2 2012 for metro Los Angeles.

These are strong signs keeping the search for apartment land deals atop the list of many builders and developers. The Los Angeles Infill Team at Land Advisors recently transacted on a rental townhome project and has a handful of other apartment deals under contract. Our team is well versed in the local rental market and eager to discuss available and active apartment projects.

For further questions and information, please contact Chris Gomez-Ortigoza, Tim Barden or Richard Byrd at (626) 376-9840.

The following news articles highlight the strength of the rental market in Los Angeles and throughout Southern California.

http://www.nbclosangeles.com/news/local/Rents-on-the-Rise-Across-Southern-California-147394535.html

http://www.zoliath.com/commercial-real-estate-blog/2012/09/12/los-angeles-apartment-market-set-for-significant-growth/

Source: Chris Gomez-Ortigoza, Marketing Consultant

Downtown San Diego is Getting Ready to Play Ball Again

The opening of baseball season at Petco Park last week means that Downtown San Diego will be host to several million visitors over the next 6 months.  While the casual fan will be concentrating on the action occurring between the foul lines, they should also be aware of the changes in the real estate off the field in the surrounding neighborhoods.

While walking to Petco Park from one of the many surface parking lots in the surrounding East Village neighborhood, baseball fans will notice the abundance of new shopping and dining options.  The local San Diego County craft beer industry, recently touted as a job generator for the region, is responsible for spawning a new generation of connoisseurs looking for new places to sample the local product.  Savvy restaurateurs have capitalized on this demand and opened several new establishments focusing on providing the local beers.   After being empty for several years, a lot of the retail space is finally being occupied.  Many new retail shops and restaurants are in the process of opening, adding to the livability of the downtown housing market.

The construction of the Main Library, a 9-story domed building at the corner of Park and 11th is well under way and should anchor future development east of Petco Park.

The confluence of maturing neighborhoods as well as a general feeling that the residential resale condominium market is stabilizing is setting the foundation for new growth.

Investors are realizing the opportunities after being dormant for several years.  A few old projects have found lifelines with new financing, replacing onerous debt and allowing them to redesign their plans to meet the current economic climate.  The downtown skyline may soon see a few more projects breaking ground in the near future. While no one is predicting a second wave of development at the scale seen in the early 2000’s, it does portend a bright future over the next few years for the area.

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

Nothing Quiet on the Orange County Front

Although January and February are typically known as the “slower” months in the real estate world, homebuilding activity in Orange County is off to a roaring start in 2012!  See what’s making the news here locally:

  1. Trumark Homes and Brookfield Homes are proposing to revitalize a Lake Forest auto mall with 75 single family homes and 151 condos – the properties are located around Auto Centre Drive.
  2. Sales continue to move product within Shea Homes & Standard Pacific’s new Blackstone master plan in Brea. Also, Jamboree Housing recently opened its 94-unit affordable Bonterra apartments within the community.
  3. FivePoint Communities broke ground on the first phase of its Great Park Neighborhoods at the end of January.  Phase one totals approximately 726 units :: www.greatparkneighborhoods.com
  4. Beach Boulevard in Huntington Beach is seeing renewed activity in the proposed mixed use developments at prime corners such as Beach and Ellis, and Beach and Warner :: http://www.ocregister.com/articles/project-283504-beach-review.html
  5. Be on the lookout for some new Land Advisors listings here in OC!

Source: Allison Rawlins, Marketing Consultant, (949) 852-8288 x26

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

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

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