Builders Gallop Ahead Despite Low Housing Sales : Antelope Valley: Even though there is a shortage of buyers now, developers say population trend and job growth point to higher demand for homes.

Despite continuing weak sales of new homes in the Antelope Valley, home builders are readying several new large-scale projects that could produce more than 30,000 new homes over the next 15 years.

The developers of Ritter Ranch are planning to start construction within the next few months on the first of 7,200 residences to be nestled in the Sierra Pelona Mountains at the southwestern edge of the Antelope Valley. Kaufman & Broad is close to getting approval for 5,200 residences at a project currently named City Ranch in Palmdale. Another 4,700 homes have been approved at Serrano Ranch in the Lancaster area.

In the 12 months that ended Feb. 15, 1,844 new home sales were reported in the Antelope Valley, according to The Meyers Group, an Encino research firm. At that rate, it would take about 17 years to sell out the major projects currently on the drawing board in the Lancaster and Palmdale areas alone.

A seemingly endless supply of new homes and bank-owned properties has seriously hurt the property values of many Antelope Valley homeowners. One can’t help but wonder what’s driving all these major development plans.

While all these building plans might seem to be adding to the oversupply, many of the proposed projects have very long-term development times, according to Bob Bray, managing director for The Meyers Group. The large, master-planned communities that will be built “take a very long time to bring on line and to sell,” he said.

Patience is the key to success in home building, said Jeff Mezger, division president at Kaufman & Broad Home Corp. in Palmdale. He added that while there seem too many projects proposed in the Antelope Valley, “there is a difference between projects proposed and actually brought on-line. Just because a project is proposed doesn’t mean it will get financed. The financial institutions are being fairly conservative.” That means that the surviving builders will be those who have deeper pockets and who can be patient.

In the Antelope Valley, the resale market posted a strong 2,400 homes that closed escrow last year, said Tom Thompson, owner of the Palmdale-based research company MarketMasters. Thompson said that many of the resales were nearly new homes that were sold by distressed homeowners and by financial institutions that foreclosed on these residences. Through May 8 of this year, there have been 865 home sales in the Antelope Valley, Thompson said. By the end of 1994, he said, “there may actually be a shortage of new homes available.”

“We look at longer-term trends of population and job growth and those trends point to more demand for housing,” said Richard Worthington, project manager for Ritter Park Associates, developer of Ritter Ranch. Population in the Antelope Valley doubled from 1980 to 1990 to about 250,000 residents and the area is expected to grow about 4% a year though 1995, Worthington said. It is this growth, he said, that will help sell the 7,200 Ritter residential units and the other commercial developments planned on 10,625 acres 60 miles from downtown.

Five years of planning and negotiation has yielded development guidelines three-inches thick for Ritter Ranch. The developer isn’t expecting instant demand, Worthington said. There is a 15-year build-out planned, with new homes available in late 1995 or early 1996. “Our concept is to deliver homes for every market segment--everything from starter homes to luxury estates,” Worthington said.

The Weissman Group of Northridge is planning 1,100 homes on 300 acres in California City, an Antelope Valley community near Edwards Air Force Base. Most of California City was divided into 52,000 subdivided lots in the 1950s and 1960s by another developer. Now, The Weissman Group hopes to finally get California City going with new homes and other construction.

Thanks to a loan from California City’s redevelopment agency, The Weissman Group has completed infrastructure work for 70 homes, with four built and another 11 under construction, said Andrew Weissman, president of the 30-year-old development company. He has been marketing “The Villages” at California City for six months, but sales have been slow.

Now, Weissman said, he is hoping to attract a supermarket to the area as a way to attract more home buyers. Currently, buyers have to drive about 20 minutes to the nearest supermarket and about 40 minutes to the nearest large shopping mall. But, Weissman remain optimistic. With the growth of nearby employers and home prices starting at just $89,900, Weissman said it is only a matter of time before his project in California City starts to get more popular.

“Some builders are trying to create a sense of urgency by predicting shortages of finished lots and price increases,” said Kaufman & Broad’s Mezger. “But, we don’t see this happening soon.”

While there may soon be a shortage of so-called finished lots with all infrastructure and entitlements in place, Mezger said, there are still plenty of semi-finished lots to keep up with demand. As a result, he doesn’t see any price increases in 1994. “Maybe in 1995,” he said.