RESIDENTIAL REAL ESTATE : Building in the ‘Right Place’ Comes With a Price Tag

In real estate-conscious Southern California, most kindergartners know the value of the right address when it comes time to put the old homestead on the market.

But being in the “right place” also has its downside--it makes new homes cost a whole lot more because the builder pays a premium for the dirt.

Premier Homes in Irvine recently bought 145 lots from Lusk Homes in the planned community of Victoria in Rancho Cucamonga--way up north in Inland Empire territory, near Upland. The total price was $4.7 million, an average of $32,414 per 4,500-square-foot lot.

At almost the same time, Kaufman & Broad Homes’s South Coast division, out of Newport Beach, purchased 127 lots in El Toro from 1st Nationwide Bank. Price of the 5,000-square-foot Orange County lots was $7.3 million, for an average of $57,480 per lot.

Byron Hoffman, the Irvine-based broker who handled both sales, said the lots in both places are zoned for detached single-family homes. When all the preparation work is finished and the appropriate state and local fees are paid, the lots in Rancho Cucamonga will have cost Premier $51,000 apiece while the El Toro lots will have cost K&B; Homes $78,000 each--a 53% difference.

And that is part of the reason that a new home here typically costs a whole lot more than the same model located 30 or more miles outside the county.