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.

POLL:  

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 Coast Sales are Climbing!

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

Indian Summer Stokes North San Diego County Coastal Market Activity

With the mid-year 2012 turning of the corner in the housing market in San Diego County, demand for housing and residential land along the North County Coastal region has heated up quickly.  Among the 15 actively-selling developments featuring new single family detached housing, the rate of absorption is approaching an average of three sales per month per development.  Most of these developments offer lots averaging between 4,000 and 6,000 square feet with approximately a third of them featuring quarter-acre lots.  New home prices range from the high $500,000’s to $1,350,000, for unit sizes spanning from approximately 2,000 to 4,650 square feet.  Seller incentives are falling and are typically in the one to three percent range.  At the same time, new home prices have begun to rise and average approximately 1.2% higher per development than a year ago at this time. In early September 2012, there were approximately 90 remaining new single family detached homes available for sale along the north coast. This is equivalent to about two months of supply given the current pace of absorption among the actively-selling developments.

Consequently, this robust recovery in the new homes market has elevated subdivision land prices.  Land Advisors Organization has seen recent subdivision land sales in the North County Coastal regions capturing prices equivalent to finished lot values spanning from approximately $425,000 for 6,000 square foot lots, up to $620,000 for quarter acre lots.  Taking advantage of this market momentum Land Advisors Organization’s San Diego Team are currently marketing two outstanding coastal properties for sale: Quail Meadows – an approved tentative tract map for 33 quarter acre lots in Encinitas and Meadowlark Canyon another 33 lots averaging over 5,000 square feet each.  The Meadowlark Canyon site is located in San Marcos, near that cities’ border with neighboring Carlsbad.  Team San Diego will also soon be marketing an ocean close property in North Coastal San Diego in concert with Land Advisors Organization’s outstanding Orange County Team. Details regarding this trophy property will be released in early October 2012.

For more information, please contact Bob McFarland or David Landes at (858) 568-7428.

Source: Bob McFarland, Marketing Consultant, (858) 568-7428 ext. 12

San Diego: How Banks Helped the Housing Market Get Back On Its Feet

“Shadow Inventory” was a dirty word for most of the past recession with respect to the housing market.  In general terms, it meant there was a large number of homes in foreclosure or soon to be foreclosed upon, which would flood the market and drive down home prices, and keep the housing market on its heels for years to come.  While no one will argue that the sheer volume of foreclosures nationwide and in Southern California is substantial, the threat of flooding the market has not materialized. 

 In San Diego County, as in most areas of Southern California, the Banks were smart and only released foreclosures to the marketplace in measured increments, so as to attract interest in inventory at reduced prices without flooding the market.  San Diego County foreclosures have recently been reported to be down 51% in comparison to a year ago.  As a result, investment groups interested in purchasing large quantities of lower priced foreclosure properties for the strong rental market have helped generate an overall market craving in San Diego County for relatively low-priced housing (generally posture below approximately $500,000).  Brokers active within marketplaces sporting significant volumes of housing priced below $500,000 report multiple offers for any available inventory, often driving up prices.  The average price of new and existing housing sold last month in San Diego County ($335,500), accounted for a 1.7% increase over the average price of homes sold in June of 2011.  The total sales volume in the resale market county-wide for single family detached homes through the first half of 2011 represents almost a 10% increase over the first six months of last year.

 

The market recovery for low-priced housing, coupled with long-standing reduced interest rates, is very slowly beginning to work itself up the price ladder of housing throughout San Diego County.   For example, in higher priced submarkets such as the North County Coastal Area, rates of absorption for new home developments have grown from an average of one sale per month per project last year, to approximately two sales per month in 2012. 

 Although generation of new jobs in San Diego County is headed in the right direction, the slow pace of employment growth has been the major force preventing a rapid recovery in the housing market.  With the potential cut back in government defense spending in San Diego County next year, the pace of job growth is not expected to pick up in the very near term.  However, continued low levels of housing inventory (the number of homes listed for sale at the end of the 1st Quarter of 2012 fell to its lowest level in nearly three years), government maintenance of low interest rates, and continued growth in demand for rental housing is expected to continue to fuel the housing market recovery, but at a continued gradual rate of growth.  Most economic forecasters are predicting housing appreciation in San Diego County in the near term to range between approximately 2% and 3% annually.  The moderate pace of market recovery may be a blessing in disguise; as a more gradual velocity in recovery will give the market its legs for more sustained growth; in contrast to the rapid inflation run-ups of past market cycles which eventually lead to faster boom to bust corrections. 

 Down the road, this bona fide housing recovery at the bottom of the “food chain” so to speak, will likely be looked upon as the flash point which signaled the beginning of the market recovery in the housing market in San Diego County.

 Source: Bob McFarland, Marketing Consultant, (858) 568-7428 ext. 12

Play Ball in Western Riverside County!

You win some…

The second quarter of 2012 is in the books in West Riverside County and public home builder sentiment is high nationally and locally. Our hopes are that the positive sales pace continues through the second half of the year which should lead to the first inning in what we hope is a long overdue, extra-inning recovery. In addition to that, according to Hanley Wood data for the second quarter, 10 of 13 active new home markets in West Riverside County experienced an increase in new home sale pricing. That’s the good news.

You lose some…

The bad news is that 2012 has yielded few land transactions to discuss because land bank REO properties have been purged from the market (currently LAO has listed one of the few remaining portfolios of bank REO assets, contact if interested) and land values are generally not yet at a level where the 2008-2010 investors would sell. If the market continues to improve however, 2013 should see a number of sales from the investor community to home builders.

Source: Mitch Casillas, Marketing Consultant, (949) 852-8288 ext. 23

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

San Diego County Market Trends Update

The Coastal Counties of Southern California (including San Diego County), continue to garner attention as on the fast track to a near-term market recovery in the housing market.

The word on the street today in the real estate industry (locally and on Wall Street) is that San Diego County is suffering from a supply shortage of new construction rental housing.

A robust supply of capital appears to be anxiously awaiting the opportunity to finance the development of new multi-family housing in “A” and “B” locations throughout the County. Given the perceived shortage of new construction rentals, nine multi-family projects totaling over 2,600 units are currently in the planning pipeline.

Vacancy rates among new rental townhouse properties that are built and designed with for-sale housing features in the County are close to 100% occupancy, likely due to the ownership of housing design and upgraded features (direct access to two-car enclosed garages etc.), attracting the many foreclosure and short sale “refugees,” or casualties from the “Great Recession.”

The majority of vacant multi-family properties are currently offered in the range of $50,000 to $100,000 per door, depending upon the strength of location.

SAN DIEGO S-CURVE: In the new construction for-sale housing sector, the “San Diego S-Curve Submarket” has dominated new home sales in the County for the last 12 months.

The S-Curve Submarket can be described geographically as: Beginning with the Carmel Valley (Pacific Highlands Ranch, Carmel Country Highlands etc.), moving east along Highway 56; and then north through the Torrey Highlands/Westview High School area along Camino Del Sur up to and including the Del Sur Ranch, and then east through the 4S Ranch and Camino Del Norte Road.

New home communities located within the S-Curve submarket attract many of the white collar executives and engineers who are employed in the biotech and high-tech firms such as Qualcomm, Sony, Hewlett Packard, etc.  These consumers place a heavy premium on the stellar public schools serving this submarket.  They also find access to this area convenient through Interstates 5 and 15, and Highway 56.  The majority of subdivision land within this submarket accommodating new single family detached housing has been equivalent to values ranging between approximately $300,000 and $500,000 per finished lot, depending upon location and lot size.

North San Diego County: In North County large scale residential development remains to be developed in master plans within Del Sur Ranch, the West Robertson Ranch, and Pardee’s land holdings in the Pacific Highlands Ranch Area (east Carmel Valley). A number of sizeable land plays located within the North County perimeter submarkets (Bonsall, Escondido, Valley Center, Fallbrook, Pala Mesa, and the I-15 Corridor between Riverside and San Diego Counties) are awaiting a demand push for the relative large supply of lots and homes in the region.

East San Diego County: In East County, the Fanita Ranch in Santee has yet to be developed.  A steady supply of small bite-sized infill land opportunities are emerging.

South San Diego County: The South Bay is the “800-pound gorilla in the room” because it has thousands of residential units remaining to be developed within existing and proposed master planned communities in the East Chula Vista area and Otay Mesa area.  The Baldwins and extended family, McMillin Communities, and Home Fed are a few of the builders/developers with skin in the game.  In addition, the area between East Chula Vista and the Mexican border (Otay Mesa, Brown Field etc.) has the potential for a large volume of new housing development within the next five years given the revised zoning currently being considered by local government.

With the pending housing market recovery, the development of a vibrant downtown San Diego housing market will be in reach again, once the dust settles concerning local government redevelopment.

Source: Bob McFarland, Marketing Consultant, (858) 568-7428

N. Central Valley Gears Up for Recovery

Land Advisors’ Northern California Team is proud to announce that it recently closed 507 single family lots in finished condition in the northern part of the City of Merced, a project known as Bellevue Ranch West.  The buyer is a long-time local farming family who plans to hold the asset as a long-term investment.

Although little building activity is occurring in Merced County at the moment, K. Hovnanian Homes is currently open and selling homes in one project.  The project, known as Eagles Ridge, is an active adult community in the Santa Nella market.

Despite the fact that Merced County new home closings are projected to hit a post-crash low volume in 2012 (off 98.9% from peak new home closing volume), year-to-date home prices are starting to rebound for regular re-sale and REO transactions with each up 2.47% and 1.96% respectively from their troughs. In addition, foreclosure sales (borrower-to-lender) are down 75.13% year-to-date from the 2008 peak.  REO (bank-to-new-buyer) sales are down 71.38% from their peak in 2009.  Our interpretation is this represents a positive sign that the overall Merced County housing market is healing – slowly but surely. (Source: Housing Intelligence Pro by Hanley Wood)

BIG LISTING: As part of a recent major lender-owned land listing for the California Division of the Land Advisors Organization, the Land Advisors Northern California Team covering the North Central Valley is actively looking for buyers for six assets in the bank’s portfolio.  Collectively, the listed assets include 479 single family homes in varying stages of development.  These asset sales represent the last few remaining bank-owned deals in the North Central Valley.  They should attract multiple investors and likely a few builders as the chance to buy lots well below replacement cost dwindle statewide.

Asset Breakdown:

  • Atwater:  Stonecreek – 129 Single Family Detached Lots in Finished Condition;
  • Winton:  Winfield Station – 22 Single Family Detached Lots in Finished Condition;
  • Modesto:  Thomas Terrace – 9 Single Family Detached Lots in Finished Condition;
  • Ceres:  Bing Cherry Estates – 39 Single Family Detached Lots in Finished Condition;
  • Merced:  Amberly Court – 162 Single Family Detached Lots in Rough Graded Condition (on 15.93 acres); and
  • Sage Creek – 118 Single Family Detached Lots in Rough Graded Condition (on 13.55 acres).

Other North Central Valley Updates:  San Joaquin County is experiencing improved new home sales in the towns of Mountain House, Manteca, and Lathrop.  New home projects are getting started in Stanislaus County, with two in Oakdale and one in Patterson.

Slow and steady as they are… all signs of building activity in the North Central Valley show that we are on our way to recovery!

Source: R.J. Radler Senior Marketing Consultant, (916) 784-3329 ext. 12; and Jim Radler Senior Marketing Consultant, (916) 784-3329 ext. 11

 

Around the Bend in the Bay Area

It feels as though we’ve turned a huge corner in the Bay Area real estate market.

Silicon Valley is producing jobs again at a solid pace (many are anticipating stock option millionaires boosting demand), and the commercial market is rebounding as office space has been absorbed and demand for new space is driving new construction.

Vacancy rates, rent increases and CAP rates for apartments are all at all time highs, spurring tons of new apartment development.

While all these data points are great signs for the recovery, they come with one potential downside—increased construction costs. While we haven’t seen it dramatically impact land values yet, a demand for labor and materials increases, construction costs appear to be headed up for the first time in many years. This could act as a bit of an inhibitor in any large run up in land prices.

Source: Steve Reilly, Marketing Consultant, (925) 791-2194

West Riverside County: 2012 Transaction Characteristics

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

BINGO! Improvements & Approvals Scootin’ Along in the Coachella Valley

In anticipation of the significant growth economists are projecting for the Coachella Valley in the coming years, several major infrastructure improvements within the Valley are nearing completion. These projects, which include freeway over-passes and major roadway improvements located along Interstate 10, Highway 111 and Cook Street, will finally improve traffic flow and accessibility for local residents and businesses.  The side effect is that it is also improving certain property values as accessibility is improved!

Measure J passed this week in the City of Palm Springs. The controversial measure will increase the City’s sales tax by 1 percentage point to 8.75% next year, which is among the highest in Riverside County.  The tax will be levied through 2037 and will bolster the City’s general fund by $200 million.  The City plans to use the money to improve and “reinvent” the downtown area. 

Global Investments just celebrated the sale of its final standing inventory home at its hillside project in La Quinta, Estates at Point Happy.  Global achieved an average sales price of over $625,000 per home, or an average of $200 per square foot.  With 29 finished view lots remaining, Global Investments is well-positioned for the foreseeable market recovery.

The City of Indio recently approved an 8-acre mixed-use senior project located along the western portion of Highway 111. With a $20 million initial investment, and an ultimate investment of over $100 million occurring over the next five years, this project is slated to generate 150 construction jobs and upwards of 250 total jobs upon completion. This western portion of Highway 111 has become a grand entrance into Indio as City leaders continue to work with developers looking to capitalize on this area’s diverse customer base, great accessibility, high traffic counts, and popular local amenities.

Source: Stone James, Marketing Consultant, (760) 219-7227