In another sign of a recovering local real estate market, five different home builders are in the process of buying land for new homes here, the first land sales in the exclusive gated community in five years.
While each purchase is small, the five deals come in the wake of several large land sales in Orange County this year. Centex Homes in Dallas bought 915 lots at Foothill Ranch, and a partnership that includes Aliso Viejo developer Kathryn Thompson bought 162 acres in Aliso Viejo.
The builders buying 169 acres in Coto de Caza for an estimated $20 million are expected to construct about 450 homes over the next few years. The purchases themselves already have industry analysts reaching for superlatives.
“We’re moving out of a cold real estate market in Orange County toward a hot market,” said Dennis Macheski, director of real estate research for the accounting firm Price Waterhouse in Costa Mesa.
“You’re seeing land activity picking up now in anticipation of a hot market for new housing sales next year,” he said. “Land prices here are definitely going up and that’s feeding the activity.”
Coto’s developers--a partnership of Chevron Land Co. and Arvida/JMB Partners--were surprised by the strong builder interest in the 4,000-acre community that occupies a four-mile-long valley just southeast of Rancho Santa Margarita.
“We had at least seven bids on each parcel,” said Tom Martin, Coto’s vice president of marketing.
The land sales are all in Coto de Caza’s South Ranch, the community’s second phase which includes 2,000 homes and a golf course. Some of the new homes will be priced as low as $200,000, making it possible for middle-class home buyers to live in the same neighborhood as home builder William Lyon, whose $20-million estate dominates a hillside in Coto’s pricier northern half.
Monarch Communities, a Laguna Niguel home builder, is in escrow to buy 90 lots near the South Ranch Golf Course, Martin said. Monarch plans to build single-family homes averaging about 3,000-square-feet and priced from $330,000 to $375,000.
Christopher Homes, a Newport Beach home builder recently started by former J.M. Peters Co. executive Christopher Gibbs, is in escrow on 94 lots, Martin said. The company plans to build country French-style homes, many of which will have golf course views. The homes will average about 2,000 square feet with prices ranging from $230,000 to $275,000.
“There’s definitely a lot of positioning going on by builders trying to get in a good place,” said Jeff Rulon, vice president of operations for Christopher Homes.
While not yet in escrow, J.M. Peters and Greystone Homes, both in Newport Beach, and Barratt American in Carlsbad have reportedly signed agreements to buy parcels at Coto.
Rita Lamkin, Greystone’s vice president of marketing, said the company is planning to buy 61 lots for townhomes, each priced at about $200,000. She said the homes, expected to be located near the South Ranch golf course clubhouse, will try to reflect the early California craftsman architecture of that facility.
J.M. Peters and Barratt executives did not return phone calls, but J.M. Peters reportedly will buy 58 lots for high-end, single-family homes averaging about $400,000. Barratt is reportedly looking at 104 lots for townhomes priced under $200,000 each.