Home Runs : Scattered Outbreaks of New-Home Fever: Lines, Lotteries and Camp-Outs
Is this a home builder’s worst nightmare or what?
First, picture 152 new houses built in an area of the northern Antelope Valley with an unusually high incidence of childhood cancer--possibly linked to nearby toxic waste sites.
Next, 19 of the homes are straddling a known earthquake fault line and had to be set back an extra 15 feet from the street.
And that’s not all.
The new residents are more than eight miles from the nearest major shopping center in Palmdale. And downtown Los Angeles is a very long commute away. But if you think Kaufman & Broad Home Corp. has had any trouble selling these houses in Rosamond, think again.
In fact, its California Willows is the hottest project in the Antelope Valley--possibly in all of California. According to both the builder and independent industry analysts, Willows homes have been selling at the rate of six a week throughout the summer and early fall.
Most Southland home builders, caught in what most experts see as a real estate recession, would give their right arm for those kind of sales numbers.
“Everything about it should be terrible,” said Eric C. Brown, vice president of Encino-based consultants the Meyers Group. “It doesn’t make sense.”
But the prices at California Willows--which start at $87,990 for two-bedroom, two-bath models--have drawn buyers in droves. As of early October, the developer had sold 130 out of 152 homes released.
The Rosamond project is but one example of what some analysts call “pockets of excitement”--new home projects posting very strong sales in a very slow market.
In Los Angeles County, sales of new single-family homes totaled 1,374 in the most recent quarter--down 61% compared to the same period in 1989. New condominium and townhouse sales totaled 1,307 units, according to the Meyers Group, down 34% from the same quarter last year. Sales of new attached and detached residences in the Inland Empire were down by about 45% over the same period. And in Orange County, new single-family home sales were down by 63.4%.
But among the 1,669 new home tracts on the market now in Southern California, scattered projects stand out as hot spots of sales activity, where it’s still like 1988, with camp-outs, lotteries and long lines.
Here are some of the Southland’s hot spots, drawn from interviews with several real estate consultants and developers. The list is not intended to be all-inclusive; it reflects, however, some glimmers of light in an otherwise gloomy market.
--In Orange County’s Anaheim Hills, buyers camped out for up to a week in July at Woodcrest Development Inc.’s Laurelwood housing project. And in late August, campers assembled yet again for the release of another 18 attached homes starting at $144,950.
Buyers were required to check in at the builder’s office three times a day--or lose their place in line.
--In La Mirada, Lyon Communities and Chevron Land and Development Co. posted phenomenal sales at its Hillsborough project this summer with drawings for nearly every new phase.
Forty-eight condos released at The Glen, for example, sold out immediately, with prices ranging from $120,000 to $190,000 for units of 800 square feet to 1,250 square feet. With homes nearby selling for $400,000 to $500,000, buyers perceived an affordable opportunity to get a foothold in an expensive neighborhood, analysts said.
--In south Orange County’s Foothill Ranch, nearly 60 buyers camped out for as long as 10 days to get their pick of 112 single-family homes by Lyon in the village of Provence. Prices ranged from $210,000 to $300,000.
--In the San Fernando Valley, 56 buyers waited for several days for a crack at 49 condos and five single-family homes at Expressions by Wilma Pacific Inc. in Mission Hills. Units ranged in price from $110,000 to $150,000, with special loans from the California Housing and Finance Agency for qualified first-time buyers.
While the project sits on only 3 1/2 acres, amenities include a basketball court, swimming pool and spa. It was the pricing and low-interest rate financing that kept buyers waiting in line, however, said Bonnie Wasson, vice president of marketing and sales at Wilma Pacific.
“There is a tremendous need for housing that is attractive and reasonably priced,” she said.
Indeed, most of today’s hot spots offer homes with prices and financing to fit the budgets of first-time, moderate-income buyers.
“The lowest price developments are doing well,” said Pierre Le Pendeven, president of Irvine-based Premiere Homes. “The marketplace is very competitive.”
“Affordability is the key word,” concurred Charles Dreyer, executive vice president of Newport Beach marketing consultants Dreyer & Young Inc. Helping with affordability, he said, are concessions being offered by builders.
In Moreno Valley, for example, Griffin Homes was able to sell out its first phase of 36 houses in three weeks--thanks to concessions. Prices for the 2,129-square-foot to 2,679-square-foot homes started at $183,990, including Jenn-Air appliances and ceramic-tiled kitchens.
In Huntington Beach, another project with prices starting under $200,000 is the Pier Colony condominium development by Resorts International and Haseko (California) Inc.
Buyers lined up for up to 36 hours in July to get first crack at an ocean-view unit in the 130-unit complex. Prices start at $175,000, which “put beach homes within the reach of middle-class buyers,” said Scott J. Scott, director of residential sales for Haseko.
About 60 units were sold through early October--and the building wasn’t even open yet.
The quick sales came as a surprise to Pier Colony’s developers. The same goes for Kaufman & Broad at its California Willows project in Rosamond.
“To be honest, there aren’t yet a significant number of amenities in Rosamond,” admitted Eric Elder, director of marketing at Westwood-based Kaufman & Broad.
Located on the north edge of the Antelope Valley, Rosamond is the site of 10 new home subdivisions.
A significant number of homes at California Willows have been set back 35 feet from the road by Kaufman & Broad because of the 2 million-year-old Rosamond fault. These homes also have special foundations to withstand earthquake shock.
The developer is careful to inform buyers of the fault line and of a 20-page study documenting an unusually high incidence of childhood cancer in the area--possibly attributable to nearby toxic waste sites. Elder underscored the fact, however, that no direct correlation has been made between certain soil contamination and the anomalous cancer rates.
But for many families looking for a new home, Rosamond is about as cheap as you can get. The company sold 70 homes from June to August at California Willows. Competitors West Venture Development and Forecast Corp. also posted strong sales in the area.
According to analysts, other hot spots include:
--Elysian in the Del Mar area by RGC RecreActions Group of Cos. of Newport Beach. Buyers lined up twice this year for attached homes starting at $158,900. The project opened officially in August with 78 out of 93 units presold.
--Montego by Warmington Homes in Agoura. Despite prices of up to $335,000, limited views and no landscaping, 28 of 30 units were presold in a drawing at this project.
--Siena Villas by the Valencia Co. in Valencia. The company sold 87 homes in the third quarter of this year, according to the Meyers Group. Units prices from $105,000 to $153,000 attracted 225 potential buyers a week to the project.
--Shadow Ridge by Regis Homes Corp. in Agoura Hills. In the third quarter of this year, Regis sold 96 attached residences priced between $125,000 and $208,000.
--Westgate by Lewis Homes in Rancho Cucamonga. The project opens this month with nearly 50 of 102 condos presold. Prices start at about $110,000.
While most of the hot-selling projects are in the “affordable” range, price is no guarantee of success.
“There are affordable projects not doing well and there are expensive ones that are,” said Randall W. Lewis, executive vice president and director of marketing for Lewis Homes in Upland.
For example, said Brown of the Meyers Group, new million-dollar homes in Pacific Palisades have been selling quite well, while some affordable projects in the Antelope Valley have fallen far short of Kaufman & Broad’s success in Rosamond.
