D.R. Horton snaps up 74 “Finished” Lots in Inland Empire

Land Advisors Organization – California Division is pleased to announce the closing of “Walnut III,” a ±20-acre residential subdivision located at the northeast corner of Cypress and Walnut, in the City of Fontana, County of San Bernardino.  YH Walnut, LLC sold the 74 single family lots to D.R. Horton (NYSE: DHI) for an undisclosed amount.

Land Advisors’ San Bernardino Team, which is based out of the firm’s Irvine office, represented the buyer and the seller in the transaction. 

Walnut III is located just south of the 210 Freeway, west of Sierra Avenue.  The lots are 7,200 minimum square feet, and were sold in fully improved condition with an approved final map.

“The Walnut III lots were the only finished lots available in Fontana,” remarked Land Advisors Senior Marketing Consultant, Winn Galloway. “The purchase will afford D.R. Horton the opportunity to commence vertical construction immediately and add coveted 2012 home deliveries to their business plan.” 

For more information about Land Advisors’ San Bernardino Team, contact Doug Jorritsma at (949) 852-8288 ext. 13/ djorritsma@landadvisors.com, and Winn Galloway (949) 852-8288 ext. 27/wgalloway@landadvisors.com.

Santa Maria… Where are the builders?

A few weeks ago, the City of Santa Maria, Community Development Department (CDD) released its list of residential projects in the development process with the number of building permits issued by the City from July 1, 2011 through December 31, 2011.

As you can see from the chart below, the Santa Maria CDD shows there are 669 future single family dwelling units and 633 multifamily condominium units that are either approved or pending approval, for future development.

One new home community by the Towbes Group is actively selling new single family homes with floor plans ranging in size from 1,208 to 2,043 square feet. “Lavigna” is a well-amenitized gated community with a pool and recreational area.  

To date, Lavigna is the only new home product currently available within the City of Santa Maria.  But even with Lavigna, the ample lot inventory indicates that Santa Maria still has room for another builder. 

This leaves us scratching our heads…. When are all these units going to be built? And who is going to build them? 

Other News from the Central Coast

Via TheBusinessJournal.com: Visalia-based Mangano Homes, Inc. is developing the mixed-use Marsh Street Commons project in the heart of San Luis Obispo. Though the recession took a toll on the San Luis Obispo market as it did in the Valley, the Central Coast town has shown a certain tenacity in the past. Read complete article.

Via RENTV.com: The Village at Broad Street Family Apartments, a new 42-unit affordable housing project in San Luis Obispo, just celebrated its grand opening to the public. Developed by ROEM Corporation, the project is located at 2240 Emily St. Read complete article

The Village at Broad Street also recently held its grand opening for the new Fresh & Easy Neighborhood Market which turned out to be a huge success.

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

It’s Always Sunny in Victor Valley

In the Victor Valley submarket, three residential land deals have closed escrow since August of this year.  Two of the deals were distressed, and all three were considered to be undervalued by their purchasers. 

  1. The first sale consisted of 276 single family lots in Victorville that sold to a private investor in late August.  The investor bought the land from a lender in “blue-topped” condition with a recorded final map. 
  2. The second project included 244 unimproved single family lots with an approved tentative tract map.  A private investor bought this Victorville project from a private homebuilder looking to generate cash and divest from some fringe markets.
  3. The third project closed escrow just this week.  A private investor purchased 36 single family lots, four model homes and seven standing inventory homes in Hesperia from a lender.  The buyer intends to finish the homes and sell them to homebuyers at retail prices.  It plans to hold the unfinished lots until the market recovers.

The larger story here is that the buyers of these properties are typical of the groups looking to buy land in the Victor Valley right now.  All are well-capitalized private investors looking for long term (4-10 years) investment opportunities.  These buyers are coming to the table with cash and are taking advantage of the extremely depressed land values in the region.  In many cases, active Victor Valley investors are utilizing overseas investors to get their deals done.

Land Advisors Organization, which has been tracking residential land values in the Victor Valley for about fifteen years, currently sees values at about $42,500 per single family lot in “finished” condition (7,200 sq. ft. lots).  At the market peak in 2006, these same lots were trading for about $130,000 per lot (a 67.3% drop from peak).

Despite the dismal news in land values, recent data shows that many Victor Valley residents are choosing to stay in the area.  In some areas, populations within the submarket are actually increasing.  People are moving into the area to take advantage of the affordable housing and increasing job growth opportunities.

Users of industrial facilities are also taking advantage of the low prices.  In September, United Furniture Industries (UFI) signed a lease for over 505,000 square feet of industrial space from Sterling Capital Investments in the Southern California Logistics Centre (SCLC).  When this new space is occupied, UFI plans to employ 400 local Victor Valley residents over the next 36 to 48 months.

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