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

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

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

KB Home Changes the Rules in Santa Clarita Valley

“When people are giving directions to their home, they always refer to some unique feature of their house as a landmark,” said Tom DiPrima, Executive Vice President, KB Home Southern California Division, in a recent Santa Clarita Signal article. “Buyers don’t want a cookie-cutter look to every home on the street.”

KB Home recently opened a new home interior design center in Santa Clarita, one of only three in Southern California.  With the opening of the center, the public homebuilder is putting homebuyers in the driver’s seat by offering customization choices that were nearly unheard of in prior market cycles, including lot selection without imposed lot premiums. 

KB Home is currently selling homes from three new communities within the Santa Clarita Valley, making it one of the most active builders in this submarket.  Home prices range from the mid $300,000’s to the high $500,000’s. Other active builders include Pardee Homes, K. Hovnanian Homes, Lennar, Shapell Homes, and D.R. Horton.

The Santa Clarita Valley is a desirable location for Southern California families as it is known as one of the safest communities in the U.S. and offers multiple high ranking schools. 

The majority of the Valley’s future developable lots are currently under the control of only a handful of developers.  Therefore, residential land opportunities are a precious find right now in this favorable submarket.

The Land Advisors team recently secured a new listing in the Santa Clarita Valley.  Stay tuned for more details to come!

Source: Michel Faris, Marketing Consultant, (949) 852-8288 ext. 18

W. Riverside County: Busier Than You Think

Amid slow overall residential land sales activity in West Riverside County, a number of transactions are still moving forward, and are nearing the finish line.

West Riverside County has experienced few improved lot transactions in 2011, as the submarket hasn’t seen any “turned dirt” since 2009.  A public homebuilder recently closed on approximately 90 “finished” lots in French Valley.  Also, two escrows for “finished” lots are scheduled to close by year’s end:

  • A public homebuilder is buying a ±50-lot project located within the City of Wildomar.
  • A private investor is buying a +100-lot project located in Moreno Valley.

In regards to the apartment/for-rent land market:

  • A ±600-unit site is close to going under contract in Temecula, marking another significantly-sized apartment land escrow in this city in the last six months.
  • Corona still has two large apartment land projects on the market.  It doesn’t appear that buyers are stepping up to the seller’s pricing expectations though.  This may be due to sellers’ knack for overestimating rent appreciation in the coming years.

The Land Advisors’ West Riverside Team put two projects into escrow this month that are in the Menifee area.

Source: Mitch Casillas, Marketing Consultant, (949) 852-8288 x23

W. Riverside County: Multi-Family Land is Hot…Or Not?

Market Activity – Closed Deals: (Single Family Detached):  Two significant land transactions have closed escrow in the West Riverside County (WRC) sub-market within the last 30 days. In both cases, the buyer was not a public homebuilder. Active buyers in the land market are private investors seeking well-located paper lot and entitlement opportunities and are very bullish in the Cities of Temecula, Murrieta, French Valley, Moreno Valley and Corona.

Public homebuilders remain quiet and are focused on selling through projects they purchased in 2010. However, one public homebuilder does have two sites under contract in Temecula.

A number of other residential projects are currently in escrow in WRC and Land Advisors is on track to close two transactions by month’s end.

On The Market: (Multi-family – For Rent):  Two prominent apartment development sites are available for sale.  Both sites are well-located within the City of Corona.  Apartment land interest and perceived value remains optimistic.  However there have been few sales to justify this optimism. Land Advisors did list and sell Magnolia Village last year which remains the highest comparable apartment land sale in the market.

Building Permit Activity:  In Riverside County last month, builders obtained government permits for 473 units, (257 single family homes and 216 multi-family units – a majority of which are apartments). This is an increase from August which saw permits at 329 units (Source: Press Enterprise).

Source: Mitch Casillas, Marketing Consultant, (949) 852-8288 x23