I keep reading that re-sale inventory is at historic lows and there are bidding wars on the small amount of re-sales that are sprinkled throughout the marketplace. This is good news on several fronts. The first being that pricing for both new home and re-sales are rising….and quickly I might add. The second is that people who are getting back into the market for a home are being beat out by all cash, quick close investors on re-sale inventory and therefore being directed to find homes from the builders. Finally, the builders themselves are running low on ready to build lots (inventory) and scrambling to backfill the demand which equates to land prices that are skyrocketing (30%+ increases in a matter of weeks depending on the market). Let’s hope that we find a normalcy in the market so we can enjoy the bull market ride in housing and land.
The Central Coast’s South Santa Barbara County submarket, which includes Carpinteria, Santa Barbara and Goleta, has seen a surge in sales volume to date with 199 closed transactions this past October. Sales volume is WAY up and our trend line has now officially bounced above our 2005 sales volume numbers. With all of this activity our current median price of $620,000 has also bumped up 2% from this time last year leaving us with one question … Where is the future inventory going to come from? With thinning resale opportunities and virtually no foreclosed homes on the market prices are sure to jump again over the next six months.
So what does this mean for Central Coast home builders looking for land opportunities along the Central Coast? Finding the right land position has traditionally been very difficult in this supply constrained market so if you are a home builder looking to build along the Central Coast, please contact Matt Power at Land Advisors Organization’s Santa Barbara office at 805.845.2660.
Source: Matt Power, Senior Marketing Consultant, (805) 845.2660
As the end of 2012 approaches, the Los Angeles infill residential market continues to see increasing momentum in both new home sales and demand for new land development.
Much of the demand for new projects in the Los Angeles basin stems from the steady flow of new home sales at projects throughout the county. In particular, there are several townhome projects in the San Gabriel Valley including Azusa, Baldwin Park and Covina that have seen absorption rates in the four to six units per month range. In Northeast Los Angeles, Pulte’s Mosaic, Heyday’s Buzz Court look to be on pace to selling out around the New Year, while Williams Homes Olive Glen project in the South Bay was named the fastest selling community in the southland.
Buyer demand for new attached or detached homes is triggering, both builders and developers, to get more aggressive when it comes to land deals. Many are even considering B and C locations. While there is not a significant supply of developed lots available in the infill markets, our team is beginning to see progressively more tract map and permit applications being processed in many cities. Through our vast database Land Advisors avidly tracks deals that are being processed and approved, allowing us the ability to tailor information to meet any acquisition criteria. Whether it’s 5, 50 or 200 units you are looking for we can guide you to deals that meet your specific goals and needs.
Buyer Demand has triggered both builders and developers to get more aggressive for land deals.
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.
Over the last 6 months, the Sacramento region has posted solid housing numbers to give the new home builders optimism for the future of this area. Stuck in the mud for the last 2-3 years, the region looks like it is pulling itself off the bottom and headed in a better direction. Although REO sales are still plentiful compared to 2005, the trends are positive.
The region should see approximately 15,000 REO sales this year, but that is 15% less than 2011 and 30% of peak 2008 numbers (22,131). New home sales for the region are expected to almost double what they were for 2011, climbing up well over 3,000 new home sales for 2012. It also important to note that currently in the region, new home sales account for approximately 3.4% of total home sales and that at the peak of the market, new home sales accounted for approximately 26.3% of the overall home sale market.
With this further evidence of a bottoming of the housing market and plenty of room to mature, builders have anticipated the next boom and they are back buying again. Approximately a half dozen deals have been purchased over the last few months with more builder deals currently in escrow.
Source: Jim Radler, Senior Marketing Consultant, (916) 784-3329 ext. 11