Housing Trends Show a Growing Attachment : Real estate: Because detached houses are out of reach for most, condominiums now account for more than half of all new home sales in Orange County, a major shift in local standards that could have far-reaching social implications.
As with most Orange County residents in the 1960s and ‘70s, Linda and Kent McIntyre grew up living in rambling, ranch-style homes.
But when the couple started house hunting in 1988, they forsook the traditional detached home with a yard--quintessential symbol of Southland success.
Instead, the McIntyres went condo shopping and bought a 4-year-old unit in Stanton for $115,000.
Less than a year later, and just a day after hanging out the “For Sale” sign, they sold that two-bedroom condo for $132,000. In December, the McIntyres and their 11-month-old son, Jake, moved into a $179,500 townhouse in Rancho Santa Margarita.
The McIntyres--both 28 years old--plan to go house shopping again in about five years, or about the time they expect to have a second child.
And the couple, part of a new majority in Orange County home-buying circles, still expect to be looking for a condo, Linda McIntyre said.
In the last few years, condominiums and other types of so-called attached or common-wall homes have accounted for an increasingly large share of the new homes sold in the county, climbing to a 47% share in 1989, according to the Meyers Group, a real estate consulting firm in Ontario.
In Riverside and San Bernardino counties--where detached housing is considerably less expensive than in Orange County--attached units accounted for only 10.2% of the year’s new home sales. And in San Diego County, attached was 33% of the mix.
In Orange County, the fourth quarter of 1989--when attached homes accounted for 54.3% of the 1,617 new units sold--was a watershed, industry specialists say.
From now on, attached units are likely to be the most prevalent type of owner-occupied housing built in the county--a major shift in local housing standards that could have far-reaching social implications.
The quasi-communal living associated with condominium dwelling--with shared recreation facilities, common maintenance and elected homeowner boards to enforce design regulations and other community rules--will begin replacing the more individualistic life style that was preferred by the county’s earlier generations of homeowners.
And in order to provide the lower-cost housing Orange County needs if it is to keep its pool of blue-collar and support service workers, builders will begin pushing for increasing densities.
The principal reason for the new popularity of attached homes is affordability--condos cost less than traditional homes because builders can put more units on less of the county’s increasingly costly land.
“There is no issue in Orange County, or in many other California communities, as important as the housing affordability issue,” said Thomas Hammond, founder and president of Hammond Co., a Newport Beach mortgage banking firm. “The demand for condos is a reaction to that. We are doing a higher percentage of condo loans in Orange County than ever before,” he said, “and the demand is getting stronger.”
Both the Irvine Co. and the Santa Margarita Co., the county’s two largest landowners and developers, plan on an average of at least 50% attached housing in all new developments on their properties, officials said.
“And as those two go, so goes the rest of the industry in Orange County,” said Mark L. Frazier, president of Barratt American Inc. in Irvine, a major Southland developer.
“The only way to make housing affordable in Orange County is to build attached housing, and to be really affordable, below $200,000, you have to have really small, densely packed units,” said Kelly McDermott, vice president of Market Profiles, a real estate marketing consultant in Costa Mesa.
McDermott acknowledges that condos are not the preference of most home buyers and that shrinking unit sizes won’t make them any more attractive.
To draw buyer interest, she said, prices will have to be considerably below what older resale homes in the area go for, and developers will have to pack their projects with amenities--turning condos from the housing of last resort into a sort of resort housing.
“The move is on to go to a resort type of atmosphere, with lots of pools and water-scapes, architectural lighting, community recreational amenities, plazas, a multilevel skyline, cantilevered buildings--anything to make it look and feel like a resort,” McDermott said. “People are used to small units in resorts.”
Several builders already are considering four-story condo projects with 50 or more units to the acre. The developments would be near major job centers in the county--a plan that could help reduce traffic by enabling blue-collar and support staff workers to live near their jobs.
That kind of density for owner-occupied housing would be a major change in housing patterns in Orange County--which got its first and only four-story apartment development just a few years ago near the Performing Arts Center in Costa Mesa.
But two proposed mixed-use developments--Main Street Concourse in Santa Ana and Mola Centre in Irvine--plan to go even higher.
The Irvine Co., too, has mulled the idea of a high-rise condo in its Newport Center. But the company probably will opt for several lower buildings instead, officials said.
At the Mola and Main Street developments, however, four-story condo units ringing office towers, retail shops and theaters will be the low-density housing. The county’s first high-rise condos, 15 stories and 194 units in Irvine and 16 floors and about 200 units in Santa Ana, are integral parts of the plan.
“The weaning away from detached homes is happening as the population ages,” said John Martin, vice president of residential marketing for the Irvine Co.
While the Irvine Co. now looks for an average of 50% attached housing in its projects, that could increase to as much as 60% attached in the next few years, he said.
“More and more, people don’t have a need for yards of their own. They don’t want the maintenance problems of a detached house,” he said.
And with its jammed freeways, air quality problems and other signs of urban stress, Martin said, “it is time Orange County considered the opportunities that exist for more than traditional detached housing. We are dealing now with a maturing county and the urbanization of its central core.”
Even on the Newport Coast--the soon-to-be-developed area between Newport Beach and Laguna Beach, where $1-million homes will be the rule--the Irvine Co.’s plans call for about half the units to be condos, he said.
Rancho Santa Margarita, the 5,000-acre planned community in South Orange County that began selling homes in 1986, was planned with a residential mix of 50% detached and 50% attached.
Santa Margarita Co., the developer, intended from the start to target first-time home buyers, who were fleeing the county in droves to find affordable homes in Riverside and San Bernardino counties, said Donald Moe, senior vice president of marketing.
Devoting half the community to attached housing, he said, “was the only way we could meet the income capabilities of a pretty big segment of the market.”
Life style choices also are playing an increasing part in the county’s swing toward condos, aided by the development industry’s all-out effort to make attached units as attractive and feature-laden as single-family homes.
Linda McIntyre said that while lower prices were an attraction, she and her husband specifically wanted a condo because they didn’t want the maintenance responsibilities that go with owning a traditional home.
“We never even thought of a detached place,” she said. “We own a boat, and Kent is a hunter and fisherman, and we’re never at home. So we didn’t want the maintenance responsibility of a detached house.
“I’m not sure that we’ll ever want one.”
A few years ago, that would have been a heretical statement--and one that would have drawn disbelieving smiles from those who knew that everybody wants a detached home.
And the McIntyres are in a minority in actually preferring a condo. They discovered at their recent 10-year high school reunion that many of their classmates had bought older homes in and around Garden Grove or moved to Moreno Valley and other Inland Empire communities in order to get into traditional homes.
But for many buyers, wanting a traditional home isn’t enough in Orange County’s superheated real estate market--one of the most expensive in the nation. With 20% down payments, buyers still need a family income of about $100,000 to buy such homes.
“There just isn’t anything in the new detached market that is affordable anymore,” said Martin, the Irvine Co. marketing chief. “There is almost nothing out there under $300,000.”
Only 15% of the households in Orange County have annual incomes high enough to qualify for a conventional mortgage of the median-priced resale detached home in the county in November, the California Assn. of Realtors reported earlier this month.
The so-called affordability gap is even greater for the county’s more expensive new detached homes.
Condos help fill the gap because they are less expensive than single-family homes. They cost less because they tend to be smaller and because builders, on average, can put twice as many units--about 12--per acre than with traditional homes.
So while the typical new detached home in Orange County sells for well over $350,000, there are a considerable number of new townhouse and condominium developments selling units for less than $300,000.
The median price of a new attached home in the county in mid-November, in fact, was $209,500, according to a survey by First American Title Insurance Co. in Santa Ana.
Nearly half of the almost 1,000 units on the market at that time could be had for under $200,000, the survey found.
The prices, combined with the improvements builders and their architects have made in condo design in the past 10 years, are making condos an acceptable alternative.
“Early on, attached housing was convertment apartments and barracks style buildings,” said Frazier, the Barratt American president. “It wasn’t very attractive, and the units were packed in densely with few garages and lots of alleys.
“Condos needed the same sort of flair and feature that detached homes had. They had to look like detached homes and not like apartments. As that has happened, the public has become more accepting. We have changed the way people think of attached housing.”
