Tag Archives: New Home Development

San Diego County’s Land Market On Its Own High Speed Train

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Unlike our Sacramento politicians’ boondoggle, San Diego’s land market has been picking up steam faster than a bullet train over the last few months.  According to reliable reports, over 2,400 new residential units were sold last year in San Diego County:

  • 1st Quarter 2012:   475 units sold
  • 2nd Quarter 2012:  680 units sold
  • 3rd Quarter 2012:   631 units sold
  • 4th Quarter 2012:   642 units sold

It is also important to note that approximately one third of the actively selling new home developments in 2012 consisted of condominiums or townhomes.  We expect that percentage to dramatically rise in the near term as monthly rental rates in many parts of the county now exceed monthly mortgage payments (i.e., P.I.T.I. and association dues), available at new construction condominium and townhouse communities.

Job Creation on the Rise

Evidence that this market momentum is growing can be seen in the sales volume reported for the traditionally slow 4th Quarter holiday season where sales exceeded the previous quarter and there was approximately a 30% increase in comparison to the 4th Quarter of 2011 (i.e., 494 sales reported in the 4th Quarter of 2011 versus 642 sales accounted for in the 4th Quarter of 2012).

Absorption Rates Expected to Increase

Although the average rate of absorptions of actively selling developments is still in the 2.0 sales a month range, a rapid decline in available new home supply is expected to boost absorption rates on remaining projects in the near term. For example, there were 113 actively selling new home developments in San Diego County during the 4th Quarter of 2011.  At the end of 2012, there were only 73 actively selling projects – that’s a 55% decline.  Approximately 60 projects sold out over the course of 2012, while only approximately 20 new projects entered the market during the same period of time.  Among the remaining new home developments in the County, approximately 2,233 units are left to either enter the market or currently remain unsold.  This equates to approximately an 11 month supply based upon a continuation of new home sales at a minimum of last year’s rate (i.e., approximately 2,428 annual sales reflecting a recovery beginning in the 2nd Quarter of 2012).  This bodes well for the health of the market going forward given 2012 sales did not pick up steam until the 2nd Quarter. Thus 2013 sales are expected to exceed last year’s total.  Historically, approximately a 12 month supply of unsold inventory (units offered for sale and remaining unsold), is considered approaching a supply/demand balance.

4thQ Actively Selling Projects

 Many housing analysts refer to the housing market rebound in San DiegoCounty and the nation as a “jobless recovery.”  While there is no question that the combination of a dwindling inventory and historically low interest rates have jump started the market, job creation in San Diego County over the last year has increased notably (approximately 29,000 annual net new jobs by year’s end in 2012 as estimated by Point Loma University Economist Lynn Reaser). This is a major factor which has largely flown under the radar due to the publicity related to a declining but relatively high unemployment rate (8.4%).

The Land Advisors Organization Team in San Diego is actively sourcing new land development and home building opportunities.  Call us today before this train is out of sight!

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

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New 360 Acre Development Coming to Monterey County

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City of Del Rey Oaks and Brandenburg Properties are preparing to team up to develop 360 acres of undeveloped Fort Ord land.  The City would like to see a low-density residential development and a hotel with condominium units and they would like to see “green, sustainable” development, including the use of cisterns to help with water supplies.  The Del Rey Oaks land is generally located north of South Boundary Road and east of General Jim Moore Boulevard.  Part of the project lies next to Fort Ord acreage the city of Monterey has planned for eventual development. FULL STORY

New Monterey County listing hits LAO

The Central Coast Team of the Land Advisors Organization is pleased to present Parcels D & E featuring 13.51 multi-family acres for ±378 apartment units.  The subject sites are located in Monterey County along scenic U.S. Highway 101, within the northerly reach of California’s Central Coast and in the heart of the famed Salinas Valley. Soledad is known for its natural beauty, moderate climate, and abundant agricultural products. Soledad is now home to more than 17,000 residents with a mix of early 20th century architecture with a charming historic downtown commercial district and vibrant new residential neighborhoods.

Contact: Matt Power at (805) 845-2660 or Jim Radler at (916) 784-3329 for more information on Parcels D & E.

Source: Matt Power, Senior Marketing Consultant, (805) 845-2660

Investors Prepare for Future Growth in Inland Empire’s “Ag Preserve”

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Senior Marketing Consultants Doug Jorritsma and Winn Galloway (or “Team SB,” as they are affectionately known in the halls of Land Advisors’ Irvine office), are witnessing a rush of investors to the “Ag Preserve” area of the Inland Empire.  The Team has closed four significant land transactions recently within the New Model Colony master plan as investors position themselves for future growth in Inland Empire land values. 

The four deals collectively consist of over 140 acres of unimproved land zoned for residential use. Each of the subject transactions was purchased by private investors from lenders looking to unload distressed assets.  The properties’ buyers plan to hold the land for up to five to seven years, depending on the rate of market recovery.

The South Ontario/New Model Colony is considered to be an “A” location within the Inland Empire. Ideally located near where the Counties of Orange, Riverside and San Bernardino intersect, this submarket offers remarkable accessibility to major Southern California employment centers and new home development potential. 

Doug Jorritsma, an Inland Empire land specialist with Land Advisors since 1999, has extensive experience selling land and residential lots within the Ag Preserve, which includes Ontario, Eastvale, Chino, and Norco.  He has sold over 6,000 lots for consideration in excess of $375 million in this submarket alone.

“As the market recovers, the New Model Colony will see increasing interest from homebuilders,” remarked Jorritsma.  “While homebuilder activity has been nearly nonexistent in the New Model Colony, the area is well positioned to see tremendous growth and future development opportunities.”

Winn Galloway, who is also an expert on land activity in the Ag Preserve and surrounding areas stated: “Land values are holding steady which is currently attractive to investors.  In comparison with 2005 land values, investors are able to purchase residential lots at incredible discounts offering an excellent opportunity for patient money to get big returns.”

In 2010/2011, Jorritsma and Galloway together closed 28 land transactions, which consisted of over 7,000 residential lots throughout the northwest Inland Empire for consideration in excess of $192 million.

New Model Colony Master Plan: The New Model Colony encompasses 8,200 gross acres and will allow for the development of 31,188 residential units on 5,196 acres.  It is bound by Riverside Drive to the north, Milliken Avenue and Hamner Avenue to the east, the Riverside County line and Merrill Avenue to the south, and Euclid Avenue to the west.

Source: Doug Jorritsma, Senior Marketing Consultant (949) 852-8288 ext. 13, and Winn Galloway, Senior Marketing Consultant, (949) 852-8288 ext. 27

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

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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