Tag Archives: High Density

West Riverside County: 2012 Transaction Characteristics

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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

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Los Angeles’ Big Idea: the Small Lot Subdivision

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Angelenos are faced with many tough questions when deciding to buy a home.  Most will ask…  How bad is the commute to work?  What amenities are close by?  Is the HOA affordable?

According to the Los Angeles Economic Development Corporation, more than half of a million people commute more than 60 minutes each way to jobs in Los Angeles County every day.  This includes commuters traveling into Los Angeles from Ventura, Orange, Riverside and San Bernardino Counties.  Many of these commuters work in areas with high job concentrations, including Downtown, Long Beach and West L.A.  For a long time, a large supply of new and affordable single family homes could be found only in the peripheral areas, far from the Los Angeles job centers. 

In 2005, the City of Los Angeles adopted the Small Lot Subdivision Ordinance, which allows for a new style of dense, fee simple homes, closer to the jobs and amenities of the Los Angeles core. 

Land Advisors’ L.A. Basin Urban Infill Team is currently involved in several small lot subdivision projects throughout Los Angeles and sees a tremendous increase in interest from builders, developers and home buyers for the product.  The projects vary in style from Spanish style contemporary to sleek, modern designs.  In addition to the variety of product, many subdivisions are located within 15 minutes of Downtown, Hollywood, Dodger Stadium, Staples Center, job centers and other entertainment venues. 

Echo Park Small Lot Subdivision

A somewhat unnoticed, but extremely beneficial aspect of the small lot subdivision is the lack of a Homeowners Association.  Many HOA fees in Los Angeles exceed $300 per month, while a typical small lot subdivision project has no fee or a maintenance fee under $100 per month.  This is an additional $200+ per month which could translate to more than $40,000 during the course of a 30-year mortgage. 

As the Small Lot Subdivision popularity gains momentum, Land Advisors continues to track newly permitted projects and sales data for active communities.  For more details about the small lot subdivision ordinance, developable sites and how active projects are selling, please contact Land Advisors’ L.A. Basin Urban Infill Team.

Source: Chris Gomez-Ortigoza, Marketing Consultant, (626) 376-9840 ext. 14