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

San Diego County Land Prices Pushing UPWARD

Residential land prices in San Diego County are trending up!  Check out the San Diego Business Journal article this week, where Land Advisors’ Senior Marketing Consultant, David Landes, discusses the County’s residential (single family & multi-family) land trends. READ HERE: San Diego Business Journal Article

Public and private homebuilders and developers are showing strong interest in big residential projects throughout San Diego County.  Land Advisors is receiving a large number of inquiries from around the U.S. and abroad for the Lakes above Rancho Santa Fe, a 248-lot project in the Santa Fe Valley.

Heard on the Street: Davidson Communities, who has been building homes in the Carmel Valley corridor for nearly 30 years, is rumored to be under contract to sell a portion of its Fairbanks Country Villa project.

The San Diego South Bay market (Chula Vista) is starting to heat up.  Builders and developers are working on future residential projects in anticipation of an economic turn.

New home projects in Coastal San Diego are doing well.  City Ventures and K. Hovnanian have recently started building communities.  Look for sales flags in Leucadia and Carlsbad.

Multi-family product remains hot.  Watch for a few cities to start considering re-zoning land from industrial and commercial use to residential use.

Redevelopment funds: Builders and developers need to continue to pressure their politicians to fight for redevelopment funds which are threatened by Sacramento. This will have a big effect on future downtown San Diego development and potential relocation of the San Diego Chargers NFL team.

Source: David Landes, Senior Marketing Consultant, (858) 568-7428

Riding the Santa Clarita Valley Rollercoaster

Homebuilders and developers looking to build and invest in the Santa Clarita Valley (SCV) are faced with high barriers to entry such as high development costs, challenging topography and various entitlement restrictions governed by the County of Los Angeles. 

Four new master planned communities are selling homes in the SCV right now: West Creek/West Hills (Valencia), Fair Oaks (Canyon Country), Plum Canyon (Santa Clarita) and River Village (Valencia).  According to Hanley Wood, there are…

  • 14 new home communities actively selling homes – 6 in Valencia, 5 in Santa Clarita, and 3 in Canyon Country.  11 are single family detached product, 2 townhomes, and one duplex.
  • Total of 1,551 units planned; 1,109 units remaining
  • 29 new home closings this quarter to date (Q3); 86 closings year to date
  • Average monthly sale rate is 1.9 units over the lifetime of the projects. Laurel Park at Plum Canyon and Artisian at West Creek have seen the highest monthly sale rate at over 3 units per month over the lifetime of the project.
  • Home prices range from $270,000 – $656,657. Homes within the communities of Aria, Artisan and Esperto at West Creek; and Echo Pointe and Echo Ridge at Plum Canyon are selling below $400,000.

Homebuilders that are currently selling new homes in SCV are Lennar (West Creek and River Village), KB Home (Echo Pointe at Plum Canyon, Echo Ridge at Plum Canyon and Milan at West Hills), Pardee Homes (Fair Oaks Ranch) and Shapell Homes (Heatherton at Plum Canyon Ranch and Sage at Plum Canyon Ranch).

Multi-family Activity:  In late spring of this year, Archstone Communities purchased 150 townhome units from Pardee Homes.

In July of this year, the property previously proposed for residential development known as Copper Creek, was purchased for $3.1 million by the City of Santa Clarita for inclusion in the City’s park and open space system. The 528-acre parcel is located on the City’s northern border with the County of Los Angeles.  Land Conservation Brokerage, Inc. of San Diego and Land Advisors Organization co-listed the property. Read more: PRESS RELEASE

Source: Randy Coe, CCIM, Senior Marketing Consultant, (949) 852-8288 x18 and Michel Faris, Marketing Consultant, (949) 852-8288 x14

Fresno?… Fres-YES! Permits, Pigskins & Progress

  • New home sales in Fresno and Madera Counties are still slumping www.ksee24.com
  • City of Fresno & City of Clovis together have 2,200 vacant finished lots.
  • Central San Joaquin Valley Single Family Permits pulled YTD = about 760
  • Foreclosures are down – www.thebusinessjournal.com
  • Fresno County unemployment is still hovering around 17%
  • One public homebuilder made the most notable lot purchase in 2011 – $85,000 per finished lot in a highly desirable area of Clovis
  • This month, the City of Sanger (15 minutes west of Fresno) eliminates development fees for new home construction. www.ksee24.com
  • 3Q 2011 – Land Advisors sold 17 acres in Clovis and 112 partially improved lots in Fresno.  Both were bank REO transactions.
  • Although many REOs sold to investors in 2011, there are still opportunities for investors to buy distressed lots/land.
  • Earlier this year Bonadelle Neighborhoods broke ground on the Brighton Master Plan. The first neighborhood will have 161 lots.  First home closing is scheduled around Thanksgiving. 
  • This summer Wilson Homes began construction on Herndon Avenue, building their new plan called “elev8ions” elev8ions.com
  • Last Saturday Fresno State Bulldogs traveled to Cal Berkeley… unfortunately the “Dogs” lost 36-21.  Next game is this Saturday at Nebraska.

Source: Mark Utman, Marketing Consultant (559) 449-4500 x127

South Central Valley: “Hold on Tight!”

2011 began with renewed optimism that California’s Central Valley residential land market would improve and home sale prices would begin to stabilize.  As Q2 rolled around it became evident this optimism may be short-lived.

In 2011 the Central Valley sub-market (including Kern, Kings, Madera, and Tulare Counties) has seen a slight decrease in foreclosure and REO sales (currently at 32% and 28% respectively); yet new home sales continue to lag far behind at a little over 5% of total sales.

Tertiary markets (including the cities of Arvin, McFarland and Wasco) which traditionally attract builders who utilize government subsidies for potential home buyers are experiencing extended wait periods, or are unable to obtain financing altogether.

Most public homebuilders and larger regional builders have left the valley or “shelved” their projects until the market shows real signs of recovery.

However, there are investors and developers with long-term horizons looking for land/lot opportunities and have been successful in closing transactions throughout the South Central Valley.

Source: Jason Hepp, Senior Marketing Consultant, (661) 702-9080 x14

West Riverside County: 4 BIG Deals

Several large residential land deals (consisting of +500 lots) have closed in West Riverside County in 2011. 

Land Advisors represented the buyers and the sellers in three of the most notable transactions: McSweeny Farms (1,330 lots in Hemet), Summerwind Ranch (3,683 lots in Calimesa) and Underwood (543 lots in Menifee).  Another large completed deal to note is Stoneridge with 2,200 lots in Unincorporated Riverside County.

Public homebuilders are currently refraining from purchasing more residential lots within the County’s secondary and tertiary markets of San Jacinto, Hemet and Perris, as finished lot values in these sub-markets are off 55-65% from peak values. 

The lot values in and around the primary market of Corona are currently off peak values by 35%.

Richmond American Homes (MDC), Beazer Homes (BZH), D.R. Horton (DHI), and Meritage Homes (MTH) have completed transactions in the West Riverside County sub-market during 2011.  However, private investors have been more aggressive in seizing opportunities, and are proving to be more active buyers.

Source: Jeff Spindler, Founding Principal (949) 852-8288 x12 and Mitch Casillas, Marketing Consultant (949) 852-8288 x23

Coachella Valley: Greater than the Peak?!

Coachella Valley FAST FACTS:

  1. The number of resale home transactions in the Coachella Valley in 2010 was greater than the number of resale home transactions at the peak of the market in 2004. At one time in 2010, the Coachella Valley represented almost 20% of all building permit activity throughout the Inland Empire.
  2. A public homebuilder recently purchased 49 more single family lots within the “Gallery” development located in North Palm Desert due to the community’s growing home sales.
  3. In the last week, Land Advisors closed two deals in the Coachella Valley, zoned for either commercial or multi-family use.

Stone James (760) 219-7227, Land Advisors’ Marketing Consultant covering the Coachella Valley sub-market, is seeing a substantial increase in land market activity in 2011, compared with the second half of 2010. Investors are realizing that while values within the Valley are at their lowest point in close to a decade, end user demand is making a comeback!

Stone is currently marketing three unique land projects in the Coachella Valley in varying stages of development. You can read more about these featured listings in the California Division’s Quarterly Newsletter.

Sacramento Region Catches a Glimpse

Northern California Report:

  1. Market experiencing more downward pressure on pricing. 
  2. New home sales are poor. 
  3. Most public homebuilders are not looking in the Sacramento region at this time.
  4. The Sacramento Region sub-market (including Sacramento, Placer and El Dorado Counties) has an abundance of developable, yet unavailable, residential lots.  Most of the finished lots in the area are controlled by the public homebuilders. Very few are distressed.

Glimpse of light: A few of the Bay Area secondary markets (a.k.a. the “commuter” markets), particularly the community of Mountain House, are starting to show signs of a comeback, which hasn’t happened in roughly 4 years. 

Source:  Jim Radler (916) 784-3329 x11, Senior Marketing Consultant for the Sacramento region sub-market

One Public Homebuilder Seeks out Antelope Valley

The word is that most public homebuilders are steering clear of the Antelope Valley (northeast Los Angeles County) these days.  One large “public” is now on the search for deals in and around Palmdale and Lancaster.  

Private investors are the more active buyers and sellers in the “AV” right now.  They’re cautious in their approach, only taking shots at “screaming” deals, with little risk.  Very few bank owned properties are left at this point.

The western portions of Palmdale and Lancaster are known as the higher quality investment areas.  However, no clear “hot spots” are currently apparent.

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