Link

SAN DIEGO NEWSLETTER 3rd Quarter 2014

The San Diego market remains strong in Q3 2014.  Coastal prices for lots and homes are at or near record highs.  All indications are for continued strength for the foreseeable future based on strengthening job growth and low-interest rates.

New Home Trends

San Diego County currently has 57 actively selling communities with a majority (33%) of the units being offered as attached product. Of the 21 builders in the San Diego market, Standard Pacific and Shea Homes each have 9 actively selling communities making them the most active builders. Sales per month are averaging 2.74 per development. The average price per square foot is $285. Average square feet is 2,810.

SD Newsletter New Home TrendsTo view the entire San Diego Newsletter click on the following link: San Diego Newsletter 3rd Quarter 2014

Want to receive our San Diego Newsletter every quarter?  Email Katie Spitznagel at kspitznagel@landadvisors.com to be added to the distribution list.

 

Source: David Landes, Marketing Consultant, (858) 568-7428 ext.11 and Devin Jenkins, Marketing Consultant, (858) 568-7428 ext.13

 

New Home Sales in Santa Barbara and San Luis Obispo County Pick Up The Pace!

New Home Closings in San Luis Obispo Climb According to Newest Data, Prices Steady

Posted on: Mar 07, 2013 07:33:55 AM

In the San Luis Obispo, CA market, closings of new homes jumped year-over-year in December, and the increase was greater than November 2012. New home closings moved from 12 a year earlier to 52 after the figure moved from eight in November 2011 to 15 in November 2012.

A total of 154 new homes were sold during the 12 months that ended in December, up from 114 for the year that ended in November.

New home closings were 52 out of 420 total closings, making up 12.4%. This is up on a percentage basis from 12 of 366 a year earlier. Following a year-over-year increase in November, closings of new and existing homes also rose year-over-year in December.

Pricing and Mortgage Trends
The average per-unit price of new homes was $442,185 in December 2012, unchanged from a year ago. This came after a 5.0% decline in November from a year earlier.

Average mortgage size on new homes fell from $339,237 to $287,378. Average mortgage size on new homes went from $290,161 in November 2011 to $379,406 in November 2012. For new home closings, the percentage of the sale price that was being financed slid 11.7 percentage points year-over-year to 65.0% in December 2012. In November 2012, there was a 23.3 percentage point surge from a year earlier.

Other Market Trends
The share of new home closings made up by attached units has risen while the share belonging to single-family homes has fallen. Attached closings made up six of 52 new home closings after accounting for one of 12 a year earlier. Meanwhile, single-family homes made up 46 of 52 new home closings after making up 11 of 12 a year earlier.

The average unit size of newly sold homes fell from 2,069 square feet a year earlier to 1,767 square feet.

Foreclosures and real estate owned (REO) closings continued to drop from a year earlier in December, but did not appear to be dragging the market. Out of all existing home closings, foreclosures combined with REO closings accounted for 23.1% of closings, below 48.3% a year earlier. The percentage of existing home closings involving foreclosures dipped to 9.5% in December from 17.8% a year earlier while REO closings as a percentage of existing home closings declined to 13.6% from 30.5% a year earlier.

Source: Housing Intelligence

New Home Sales and Prices Both Increase in Santa Barbara According to Recent Data

Posted on: Mar 07, 2013 07:34:03 AM

The Santa Barbara, CA market saw a rise in new home closings in December year-over-year, and the increase was greater than November 2012. New home closings moved from six a year earlier to 40 after the figure moved from nine in November 2011 to 19 in November 2012.

A total of 192 new homes were sold during the 12 months that ended in December, up from 158 for the year that ended in November.

New home closings were 40 of the 419 total closings, up on a percentage basis from six of 429 a year earlier. Following a year-over-year rise in November, closings of new and existing homes slipped year-over-year in December.

Pricing and Mortgage Trends
The average per-unit price of new homes was $642,463 in December 2012, up from $635,250 a year ago. This followed a 34.9% decline in November from a year earlier.

Average mortgage size on new homes increased to $434,179 from $417,104 last year. It went from $353,984 to $350,950 from November 2011 to November 2012. Of the overall sale price, the percentage that was being financed rose 1.9 percentage points year-over-year to 67.6% in December 2012. This was another boost after November 2012 when there was a 28.1 percentage point rise from a year earlier.

Other Market Trends
As a share of new home closings, single-family home closings have risen from last year while the share belonging to attached units has fallen. Single-family home closings made up 39 of 40 new home closings after accounting for five of six a year earlier. Meanwhile, attached units made up one of 40 new home closings after making up one of six closings a year earlier.

Foreclosures and real estate owned (REO) closings fell in December from a year earlier, but remained a drag on the market. Together, foreclosures plus REO closings made up 30.6% of existing home closings, down from 49.6% a year earlier. The percentage of existing home closings involving foreclosures dropped to 11.3% in December from 26.0% a year earlier while REO closings as a percentage of existing home closings fell to 19.3% from 23.6% a year earlier.

Source: Housing Intelligence

Source: Matt Power, Senior Marketing Consultant, (805) 845.2660

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

LA – Selling Fast

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.

Related Article:

http://ourweekly.com/los-angeles/olive-glen-called-fastest-selling-new-home-community-southland

Source: Chris Gomez-Ortigoza, Marketing Consultant, (626) 378-9840 x14

WANTED: FRESNO LAND DEVELOPERS

According to Fresno real estate blogger, BoNhai Lee, the City of Fresno says ±16,000 acres of land remain for housing development.  With that being said, Fresno is in need of land developers to entitle and process new tentative tract maps.

Land Advisors Organization’s Fresno office is happy to announce the San Joaquin Valley is (finally!) coming alive in “A” locations.  Builders are complaining there are not enough improved lots to choose from in Clovis and northeast Fresno.

POLL: 

RECENT CLOSINGS (September 2012): 

  • An investor purchased 36 finished lots in Madera (brokered by LAO)
  • A farmer purchased ±37 unimproved acres in Clovis (brokered by LAO)

NEW COMMUNITIES:

HOME SALES: According BoNhia Lee (@bonhialee), new home sales accounted for 5% of the Central Valley residential transactions this year compared to 26% in 2006.

Source: Mark Utman, Marketing Consultant, (559) 549-6326

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

Sacramento… Healing Period?

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

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

Sacramento: Where’s the Dirt?

The Sacramento region finally appears to be emerging from the homebuilding doldrums.  Over the last several months, homebuilders seem to have a new found confidence as new home absorption levels have begun to tick up to levels not seen for several years.

Pricing on the other hand, is still lagging with maybe a small bump in appreciation.  All of this said, ready-to-build lots are becoming scarce within the Sacramento submarket, and at this rate, some areas could possibly end 2013 with a lot supply of zero.

The key drivers to getting builders back to Sacramento will be continued increased scarcity of deals in the San Francisco Bay Area, in addition to sustained new homes sales that we have seen in the area over the last several months.

The Wall Street Journal recently reported that the recent rise in homebuilding could be thwarted by an unlikely factor, a shortage of land in desirable locations.  Homebuilders are realizing they cannot focus strictly on the Bay Area locales just due to the fact that high land prices and land scarcity will forbid them from ramping up deliveries and allowing them to grow organically.  If they want to be able to produce new home delivery volume, they will have to start looking in the Sacramento region as well as some parts of the Central Valley.  If and when they move eastward, we will start to see homebuilders look at “paper” lot or entitlement deals, where in the past they were only focused on finished lots.  Time will tell.

Source: Ryan Long, Senior Marketing Consultant, (916) 784-3329 ext. 16

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

KB Home Commands Market Share in Antelope Valley

Land Advisors’ Antelope Valley Team is working hard to identify every land opportunity for public and private builders and investors in the High Desert.  The best land deal opportunities are few these days, but the Team currently has three exclusive listings, two of which are now under contract with close dates quickly approaching.

Springtime in the A.V.: Photo of the Antelope Valley California Poppy Reserve

KB Home continues to dominate the Antelope Valley’s new home sales market.  The public homebuilder is leading the charge with eight actively selling projects in the region.  One or two private homebuilders are trying to break into the action, but are reporting slow sales according to Hanley Wood.

Investors are keeping their eyes open for the “right” land deal opportunities in the High Desert submarket.  Resales are holding steady and not many finished lot opportunities are available.

Source: Michel Faris, Marketing Consultant (949) 852-8288 ext. 14

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

Central Valley: So Yer Sayin’ There’s A Chance…

Mixed signals are making it quite difficult to predict where the Kern County residential real estate market is headed in the months to come.  Recent headlines from The Bakersfield Californian include:

Then on the flip-side, there’s “Region leads nation in construction job growth.” Hmmm…

New home sales continue to make up a small part of total sales throughout Kern County and beyond at roughly 6%, according to Hanley Wood.  However, it is clear that well located projects with excess finished lot inventory are now appealing to both local and national builders up and down the 99 Corridor (CA SR 99).

The main issue at hand still remains… Although new home sales appear to be picking up, foreclosures and REO’s still make up over 50% of sales, and in many cases, homes are selling for just over $100/Sq. Ft. (Hanley Wood). Many “broken” projects were purchased by investors during the downturn, yet residential lots are still trading at or below replacement cost.

As a consequence, some investors are forced to sell their investments at a loss, or wait until home prices raise so residual lot values eventually increase.

As with every storm, there is a silver lining.  Construction jobs in Bakersfield have recently increased dramatically.  The Bakersfield Metro area added a higher percentage of new construction jobs over the past year than any other market in the United States according to an Arlington, VA trade group. Federal funding from the Thomas Roads Improvement Program and the American Recovery and Reinvestment Act, along with various Health Care industry expansions and upgrade projects are the main contributors to this growth.

In addition, according to Richard Chapman of the Kern County Economic Development Corp., local growth in the manufacturing, warehouse, and distribution sectors has also spurred along recent construction.  Growth and improvement in these areas are so critical as Bakersfield continues its quest to becoming a more dynamic and diverse economy.

Hanley Wood recently ranked Fresno County (#4) and Kern County (#6) in its list of Top Ten California Counties with the highest new home sale projections for 2012.  Land Advisors is asking, “Is this a sustainable positive upward move or just another head-fake?

Source: Jason Hepp, Senior Marketing Consultant, (661) 702-9080

Greener Fairways In Coachella Valley’s Future!

What does a $20M pledge for a new medical school, the opening of a privately-funded law school, and a new four-year undergraduate degree program all have in common?

Answer: The Coachella Valley – All of these bright new developments are occurring NOW within the Coachella Valley!

The Coachella Valley can also boast:

  • Two new private homebuilders have entered the sub-market;
  • Several public homebuilders have closed on multiple finished lot opportunities; and
  • A 25-year real estate veteran backed by “New York money” has  closed on and currently entitling a 7,800 unit community

Home Sales Activity

New home sales: Toll Brothers experienced five sales at its new Alta project, located in South Palm Springs, within the first month of its opening!  By selling homes with a price point range from the mid-$700,000’s to the mid-$800,000’s, Toll Brothers is demonstrating how the high-end home market is returning to the Coachella Valley.

Home Resales:  According to MarketWatch, resale home prices have risen 13% since September 2011. For the first time in years, resale inventory is below 4,000 homes and number of months supply is under four months. Last year in April, over 5,700 homes were on the market (approximately 5.7 months of inventory). While prices are still low, both sales pricing and absorption are heading in the right direction!

Noteworthy Permit Activity

The City of Rancho Mirage has issued more new home permits so far this year than all new home permits issued in the City in 2010 and 2011 combined!

In case you missed it:

Stone James led a panel discussion on land in April at the Desert Valleys Building Association’s economic update, “Cut to the Chase for 2012: Our Economic Future.”  The topics and insight generated from the panel discussion are well-summarized and quoted in an article by Mike Perrault at The Desert Sun (via MyDesert.com). Read the article to see what Stone and his fellow real estate experts had to say: Panel: Housing the Best Bet for New Growth.

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

Surf & Sales Up in Ventura County

In the last week of March 2012, the California Division of Land Advisors Organization closed the final portion of “The Bungalows at Beach House,” located in Port Hueneme, Ventura County.  The Ventura County Team (Richard Byrd, Randy Coe and Michel Faris) represented the buyer and the seller in the sale of 29 “near finished” lots in the former John Laing Homes community.

The Bungalows at Beach House originally consisted of 64 lots of which 35 have already been built and sold. The 29 subject 4,000 – 5,000 square foot lots sold to Standard Pacific Homes; the seller was a court appointed receiver.

The Port Hueneme deal was a significant transaction in a wave of SEVEN land transactions that the California Division closed in the last week of the first quarter.  The number of transactions rushing to the finish line at the end of the first quarter may signal a broad-based upturn in the California land market, and the diverse characteristics and widespread geographic reach are exemplary of the California Division’s extensive residential land expertise.

“Improved lots are extremely scarce in many markets throughout California,” said Tom Reimers, the California Division’s President.  “The relative success of the spring selling season has caused homebuilders’ supply of buildable lots to dwindle, and is pushing the builders back into the land market for replacement lots.”

VCStar.com reported: In Ventura County, 820 single-family homes and condos were sold in March, compared with 757 in March 2011, an increase of 8.3 percent. In February this year, 606 homes were sold. In January, 561 homes were sold.  The median price for a home sold in Ventura County in March was $350,000, compared with $349,000 in March 2011. READ MORE

Source: Richard Byrd, Senior Marketing Consultant (626) 376-9840 ext. 13; and Michel Faris, Marketing Consultant (949) 852-8288 ext. 14.

Rebound in Sacramento …and We’re Not Talkin’ Hoops

The data says it all.  A look at the latest Ryness Report will tell you that new home sales are solid across the board in just about all actively selling communities in Sacramento, El Dorado and Placer Counties.

Pricing is still flat but absorption is clearly picking up.  Builder anxiety for the spring selling season seems to be subsiding and confidence in the market is growing.

More evidence to a turnaround is the fact that a very prominent publicly traded homebuilder who vacated the Sacramento Region a few years ago is back.  A new division president is once again at the helm and looking to grow the Sacramento Division, including the Central Valley and Reno.

See the data: Sacramento Regional Real Estate Trends for March 17, 2012

Sacramento foreclosures down 8.8% from a year ago: Foreclosure activity in Sacramento during February fell when compared with the same period a year ago but remained largely unchanged from January, according to figures released Thursday from RealtyTrac, an online foreclosure information company.  Full Story

Region home sales up by 16.6%, but prices are down: Homes sales in the four-county Sacramento region were higher by 16.6 percent on a year-over-year basis in February, according to data released Thursday by real estate information firm DataQuick.  Average prices were lower from a year ago, however, for all four counties.  Full Story

Source: Jim Radler, Senior Marketing Consultant, (916) 784-3329 ext. 11

Window of Opportunity in Ventura County

Land Advisors’ Ventura County Team (comprised of Michel Faris, Randy Coe, and Richard Byrd) are pleased to offer an exciting new listing in the Ventura County submarket. The new ±8-acre listing, known as Northbank Meadows is a rare multi-family development opportunity in the highly desirable yet extremely supply constrained City of Ventura.

Historically, homes within Ventura County are highly sought after by homebuyers because of the County’s easy-going, high-quality beach lifestyle, in addition to its proximity to L.A. County job centers. Longstanding development constraints have kept Ventura County from over-development.  Amid the slow growth, land values in the submarkets are holding steady and homebuilders and developers are taking another glance at opportunities in the area as the macroeconomic environment improves.

County Home Sales Up; Median Price Falls via VCStar.comVentura County home sales increased slightly last month, while median prices continued to drop despite record-low mortgage rates… DataQuick reported that 561 homes sold in Ventura County in January — an increase of 2% compared with the same time last year. The sales include new homes and resold single-family homes and condos.  DataQuick also reported the median price of homes in Ventura County at $322,500, a 7.9% decrease compared with the same time last year. Read more

Source: Michel Faris, Marketing Consultant, (949) 852-8288 x14

Central Valley Housing Market on the Mend?

Home sales are typically slow everywhere in December but some markets in the Central Valley showed signs of life at the end of 2011. According to Affiliated Appraisers, the median sale price for existing single family homes in the Bakersfield area was $132,000 in December 2011, up 9.6% over December 2010. The supply of active listings of homes for sale dropped 9.3%.  Foreclosures continue to significantly weigh on the market as bank-owned property accounted for roughly a third of the homes sold in 2011.

Investors for single family homes, who buy property to rent to tenants, are returning to the Central Valley, and made up roughly a third of home sales in 2011.  Some successful investors were able to “flip” property for a profit.  Affiliated Appraisers reported that 23 homes were “flipped” in the Bakersfield area since April 23 of 2011. 

Home prices have fallen a whopping 56% from the peak in June 2006 (current median home price is $131,500).  As long as banks do not flood the market with distressed product, home prices should remain somewhat stable in the coming months.

As a consequence to uncertainty in traditional financial investments like stocks and bonds, Central Valley investors have now turned to existing multi-family buildings. As banks continue to work through their single family detached REO inventory, this seems like a logical place to deploy capital. Occupancy rates are hovering around 90% for even for C and D level properties.  The Bakersfield area market had over 160 multi-family residential sales transactions in 2011.   However, it still makes little sense to develop new multi-family land at this point, as direct costs and fees are prohibitive.

Source: Jason Hepp, Senior Marketing Consultant, (661) 702-9080 ext. 14

Winds of Opportunity Skipping over the Antelope Valley

Private investors are taking a cautious approach to buying land in the Antelope Valley.  Home sales are still slow and homebuilders are scarce. 

KB Home is still the most aggressive buyer of finished lot opportunities in Lancaster and Palmdale.  The public homebuilder has captured the Antelope Valley sub-market to the detriment of other public homebuilders. 

The Antelope Valley is the most affordable area of Los Angeles County, and KB Home is taking advantage of record low land values by scooping up several finished or semi-finished land deals.  The homebuilder has always believed in the profit potential of this sub-market and is now reaping the rewards of beating out the competition in land acquisition.

The Land Advisors High Desert Team (Michel Faris & Randy Coe) recently facilitated the closing of two transactions where KB Home purchased semi-finished residential lots in Lancaster.

The homebuilder completed its assemblage with the purchase of additional semi-finished lots within The Reserve for a total ownership of 37 lots.

KB Home also purchased 18 additional single family lots in semi-finished condition in the Sandstarr West community located on the southeast corner of Avenue K-8 and 27th Street West.

Other High Desert investors are waiting for home sales to pick up in the windy Antelope Valley, in addition to the emergence of more finished lot opportunities.  Until the sub-market begins to see signs of a broader economic rebound and improved home sales, performance is going to continue to blow right by.

Source: Michel Faris, Marketing Consultant, (949) 852-8288 x14

Homes Sales jump in Santa Clarita Valley

Sales of existing single family homes in the Santa Clarita Valley (SCV) jumped a whopping 22.2% in October, while the overall California home sale market increased by only 3.1%. Existing home sales rose by 7.3% and condo sales rose by 28.8% from September to October in the SCV.

As parts of the SCV are nicknamed “Awesometown,” this suburban region just north of the Los Angeles Basin is a highly desirable place to live. With homes more affordable than ever and record low interest rates on home loans, the local SCV single family home market is performing better than the San Fernando Valley, where the median price of homes that sold last month was $350,000.  

Multi-family construction is up throughout L.A. County.  However, permits for single family housing still rule the Santa Clarita Valley. Single-family construction has historically been more consistent than multi-family projects.

Very few distressed/bank owned residential land assets are currently available for sale in the Santa Clarita Valley.

Source: Michel Faris, Marketing Consultant, (949) 852-8288 x14

Naughty or Nice? New Home Shoppers Check the List Early in Sacramento

With Thanksgiving behind us and Christmas just around the corner, holiday shopping has officially started.  For housing in the Sacramento region, homebuyers started shopping early and are likely to continue through the New Year.  October 2011 showed a 19.5% year to year increase in volume. The reason?  Home prices are continuing to fall… 

San Diego-based DataQuick reported that the average sale price of homes in the Sacramento four-county region declined 9.5% from a year ago.  Although, the decline is not because of falling home values… It appears as though more buyers are flocking to less expensive homes, which is influencing the downward trend in average home price.

The number of months of new home supply on the market is down to 4.2, and even as little as 2.0 in some stronger markets.

Land Deals:

  • The New Home Company purchased a 128-lot subdivision in the master planned community, The Parkway in Folsom.  All but 44 of the lots were “mostly improved.”  Construction on the new homes within the subdivision is scheduled to begin in March 2012.
  • Most of the distressed finished lot deals have already sold in the Sacramento Region, leaving very few for opportunistic builders and investors.
  • The heavy multi-family activity in the San Francisco Bay Area has not yet moved east to reach Sacramento.   Multi-family builders are currently obtaining $1.00 to $1.20 per square foot revenues, which is not enough to justify construction for new product in the Sacramento region.

Source: Jim Radler, Senior Marketing Consultant, (916) 784-3329 x11

Two Homebuilders Walk into a Bar…

We couldn’t think of anything either… But here’s an update on San Bernardino & North Central Riverside Counties:

San Bernardino & North Central Riverside Counties currently have 49 actively selling projects, up 67% from 2008, when there were only 16 actively selling projects. (Source: Hanleywood)

  • K. Hovnanian takes the lead with 6 actively selling projects
  • The majority of active homebuilders in this sub-market have two actively selling projects. 

Rental rates have increased 2.2% in the San Bernardino-Riverside-Ontario Metropolitan Statistical Area (MSA) since October 2010

Clarion purchased 3 multi-family properties for a combined price of $100 million and a total of 586 units.

  • The largest property was a 264-unit complex in Rancho Cucamonga called Village on the Green Apartments.  This complex sold for $43 million.
    1. The complex is surrounded by fairways of Empire Lakes Golf Course and is within close proximity to Victoria Gardens and Ontario Convention Center.
    2. Article link: http://www.rentv.com/content/homepage/mainnews/news/14883

Number of Inland Empire foreclosures DECREASE:  Foreclosure filings in San Bernardino fell nearly 17% from August to September 2011, while national foreclosure activity increased by less than 1 percent from Q2 2011 to Q3 2011.  (Source: San Bernardino Sun Staff Report)

Source: Doug Jorritsma, Senior Marketing Consultant, (949) 852-8288 x13, and Winn Galloway, Marketing Consultant, (949) 852-8288 x27

Spotlight on FOLSOM

Located northeast of Sacramento, the City of Folsom is just south of Folsom Lake in Northern California.  Folsom is currently the most desirable sub-market in the Sacramento Region for homebuilders, where average sales prices of homes are now close to DOUBLE those of the overall region.

Folsom Fast Facts:

  • Residential land north of U.S. Highway 50 traded for $1 million per acre (raw) at the peak of the market in 2005.
  • At the current absorption pace, Folsom will be out of finished lots by 2014/2015.
  • Folsom enjoys a 5.7% unemployment rate (current California unemployment is 12%), and thus has minimal foreclosure activity.
  • Folsom’s schools consistently rank in the upper echelon of school districts not only in the region but in the entire state.

Landmark Folsom REO Property Available for Sale:

Land Advisors Organization is currently marketing Carpenter Ranch – a 1,019-acre master planned community located in Folsom’s Sphere of Influence in Sacramento County.

The property rests along 1.5 miles of Highway 50, and was recently entitled for 2,263 residential units and over 3 million square feet of commercial uses.  Previous investment in the land totals over $100 million.

Source: Jim Radler, Senior Marketing Consultant, at (916) 784-3329 ext. 11.

Santa Clarita Valley Economic Snapshot: IMPROVING

Santa Clarita Valley Economic Development Division’s Economic Snapshot report for July indicated that the Santa Clarita Valley (SCV) local economy is doing better than many of its surrounding communities.  Housing prices are moving UPWARD, and the local unemployment is around 8%.  Notice of Defaults recorded between July 1010 and July 2011 dropped 32%.  Read more: http://www.the-signal.com/section/24/article/52558/

SALES STATS: Q3 2011, Santa Clarita Valley (Source: Hanley Wood)

Detached Product

  • Regular Resale: Average Sale Price $435,450; Average Price/SF $195; Closings 394
  • REO Sale: Average Sale Price $339,079; Average Price/SF $169; Closings 121
  • New Home Sale: Average Sale Price $475,857; Average Price/SF $191; Closings 42
  • Foreclosures: Closings 198

Attached Product

  • Regular Resale:  Average Sale Price $240,126;  Average Price/SF $177;  Closings 182
  • REO Sale:  Average Sale Price $182,178;  Average Price/SF $155;  Closings 88
  • New Home Sale:  Average Sale Price $465,167;  Closings 9
  • Foreclosures:  Closings 137

Building permits are still hovering at incredibly low numbers these days in the SCV.  According to a recent Santa Clarita Signal article, most of the SCV’s building permits requested are for single family units.  This differs greatly from neighboring sub-markets where multi-family activity is booming.

Builders and developers are still waiting for lower development fees in the Santa Clarita Valley.  They are having a difficult time finding residential land deals that make sense given the current economic environment. (Development impact fees are currently averaging approximately $50,000 per lot.)

Source: Michel Faris, Marketing Consultant, (949) 852-8288 x14

Urban Infill: War and Peace in the LA Basin

The Land Advisors Urban Infill team is currently working with several developers who have recently submitted tentative tract maps, are revising existing tract maps, or intend to submit new tract maps for for-sale housing developments.  The Team is seeing the highest concentration of activity in Northeast Los Angeles (Echo Park, Silver Lake, Eagle Rock, and Glassell Park).

The City of Los Angeles Department of Building and Safety’s September newsletter revealed that the City’s number of housing starts year-to-date is still low (-31% YOY).  However, plan check revenue is up (41% YOY), indicating an upswing of future housing supply.  Newsletter Sept 2011

Ideally located new home communities selling well-designed homes are showing strong sales numbers. In the third quarter, the Urban Infill Team led the closing eight single family attached lots at Lennar’s Playa Vista. In response to the growing demand for additional product in Playa Vista, Lennar closed the 2nd and 3rd lot take downs four months early. 

Los Angeles Land Use Update:  The Planning Department’s Code Studies Section unveiled late last week a draft ordinance that would allow the creation of site-specific development rules that could loosen-up laws on density, setbacks and open space requirements. The new process, called Planning Unit Development, is part of the Department’s 3-year-old effort to streamline the Municipal Code while also encouraging more public participation. Some might say those goals are as congruent as war and peace. http://www.landusela.net/2011/09/planning-dept-unveils-latest.html

Source: Tim Barden, Marketing Consultant, (949) 852-8288 x30, and Richard Byrd, Senior Marketing Consultant (626) 376-9840 x13, and Chris Gomez-Ortigoza, Marketing Consultant, (626) 376-9840 x14