Inland Empire… It’s FBO!

Economic news in Southern California’s Inland Empire appears to be looking up these days.  But is the homebuilding recovery here to stay?  Is it Facebook Official?

Last week, Land Advisors’ Senior Marketing Consultant Doug Jorritsma gave a presentation to a group of professionals regarding the state of the land/homebuilding market in the Inland Empire (Western San Bernardino & Riverside Counties).  On board with the wave of social media sweeping our communication style these days, Doug kept the message short, sweet, and direct, highlighting the market facts with a Facebook-like thumbs up or thumbs down.  Check ‘em out here…

DISLIKE

  • Unemployment/job generation still a big problem
  • State financial crisis looms large (Redevelopment Agencies and Schools)
  • Construction lending still challenging
  • Number of housing permits is currently 28% of what is was at the market’s peak

LIKE!

  • The worst is behind us!
  • Lenders dispositions are done! (Except for the little stuff.)
  • Most public and private homebuilders will be increasingly active going forward
  • Single and multi-family building permits are on the rise – (Currently DOUBLE 2009 numbers)
  • Institutional capital and private equity slowly giving THUMBS UP
  • No finished lot supply creates a near-term shortage
  • Land values are slowly trending up
  • Foreclosure activity is trending down
  • Five-month upward trend of improving new home sales
  • Big box industrial gets a double THUMBS UP
  • Interest rates are to remain low through 2014
  • Consumer confidence is improving which means retail sales are improving
  • Apartment vacancies currently at 4% – 6%, rents are up 1% – 5%

Land Advisors ♥’s Social Media

Source:Doug Jorritsma, Senior Marketing Consultant, and Winn Galloway, Senior Marketing Consultant (949) 852-8288

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Big Moves and Bright Ideas in Northern Central Valley

Amazon.com makes a move (to CA): Even the cynics out there are saying that NOW is the time to buy a home.  With interest rates and home values at an all time low, it is certainly a buyer’s market these days.  The problem is remains however, that limited numbers of potential buyers have enough equity ready to put into buying a new home.  The unemployment rate in California and nationwide is still painfully high and we are all waiting for job creation to help boost the economy and the homebuilding industry. 

Good news for California:  Amazon.com made a promise last year to bring 10,000 new jobs to California, and now, according to SacBee.com, the online sales giant is apparently ready to make good on that pledge, starting in western Stanislaus County.  Amazon is expected to announce soon it will build a 1,500-employee distribution center off I-5 in Patterson, west of Modesto.

Patterson profile:

  • Although Patterson has experienced few to no home sales in last two years, the city has shown to be a viable submarket for home sales. From 2002 to 2009 just short of 3,000 new homes sold in this area.
  • Fewer than 200 “finished” lots remain within the City of Patterson.
  • 1,500 new Amazon jobs will dramatically reduce current 18.4% unemployment rate.

New Vision for Merced: At the Merced City Council meeting this month, the public weighed in on the Merced Vision 2030 General Plan, which City officials hope will turn Merced into a dynamic urban entity by 2030.

The concerns at the meeting varied… UC Merced officials were elated with the inclusion of the campus and the University Community housing project in the “Vision.”  On the other hand, some city residents were concerned about the population projections and the potential impacts on agricultural land.

The City Council approved the plan by a 6-1 vote.  Castle Farms, a proposed mixed-use development at Highway 59 and Bellevue Road, and Mission Lakes, a community plan bounded by Mission Avenue to the north, agricultural land to the south and Highway 59 to east, were both left out of the plan because some of the City Council members believe the footprint of the plan is too big.

Bright Idea on Campus: They say college is the time to “find yourself.”  Well the students of the newly-opened University of California, Merced are taking that idea to the next level, and are finding themselves in some pretty nice homes.  Many students are ditching the traditional, crammed on-campus dorms for a more spacious and luxurious option: the vacant foreclosed “McMansions” left behind by the housing boom.

Nearly 5,200 students attend UC Merced, but the university has only enough campus housing for about a third of its population.  The Merced community is hearing mixed reactions from the students who are renting the 5+ bedroom homes and using them in an unconventional way, but overall the sentiment is currently positive.  Neighbors are happy to not have homes left vacant on their street, and the current title holders are happy to be collecting some kind of income from the properties.

Source: RJ Radler, Senior Marketing Consultant, (916) 784-3329 ext. 12