O.C.'s Rancho Mission Viejo reflects rebound of housing market
With its tidy model homes, gleaming new clubhouses and rows of fresh wooden frames, the “village” of Sendero in south Orange County offers a pristine view of the new building boom.
The development — which will total about a thousand new homes on 690 acres when finished — shows the degree to which big builders are confident that real estate has stabilized.
Sendero is the first leg of a project that has been long in the works, called Rancho Mission Viejo. Developers expect 14,000 homes will go up in this massive, master-planned community over the next two decades.
The new-home project sits just east of San Juan Capistrano, on a bucolic stretch of one of the last big developable ranchos of Orange County. Land grants under Spanish, and then Mexican, rule called ranchos encouraged the settlement of big chunks of California during the 18th and 19th centuries, and led to the control of large swaths of land by select businessmen and families.
The entire Rancho Mission Viejo project is a master-planned community developed by a family-owned business with the same name. The ranch once spanned more than 200,000 acres, from which arose the cities of Rancho Santa Margarita and Mission Viejo, and the home developments of Ladera Ranch and Las Flores.
The area also includes several parks, nature reserves and the Marine Corps base at Camp Pendleton. Rancho Mission Viejo is the final housing project to grow out of the land held by the company.
“It is a very significant project, in one of the strongest markets in the United States,” said Steve Johnson, Southern California director of research firm Metrostudy. “Orange County is sort of the center of the universe in terms of development activity and the commitment of money.”
Shelved during the waning days of the last expansion, the new homes now for sale will meet a market characterized by high demand, short supply and rising prices. After hitting bottom last year, housing snapped into a sharp recovery this year, spurred on by low mortgage interest rates and relatively low prices.
“We think the timing was very good, and in the real estate business, timing is part of what you hope to get right,” said Paul Johnson, senior vice president of community development for Rancho Mission Viejo. “The real estate market is fully recovering.”
The return of new-home building has helped give the broader economy a boost.
New construction across the region has taken off this year. Builders began work on some 2,944 homes during the first three months of the year throughout Ventura, Los Angeles, Orange, Riverside and San Bernardino counties.
That’s a 7% increase from the previous quarter and nearly double the pace from the 1,513 homes started during the first three months of 2012, according to Metrostudy.
Orange County, the priciest market in Southern California, has seen its median home price rise 24% over the last year to $540,000 in May, according to real estate research firm DataQuick. With its affluence and comparatively low unemployment, the county has also emerged as one of the most attractive for builders, with much of the construction in the county concentrated in the pricier segments of the market.
The vast majority of newly built, single-family homes sold in the first three months of the year went for more than $500,000, Metrostudy said. Construction has also picked up, with a total of 761 homes started in the county in the first quarter, a sharp increase from the 444 started a year earlier.
Other big home developments are in the works. Luxury builder Toll Bros. last year snapped up a big chunk of land in south Orange County and is partnering with Shea Homes to construct more than 2,000 homes and apartments.
Building is underway on what will total 726 single-family homes and detached condominium units in Pavilion Park, the first part of the Great Park Neighborhoods development in Irvine.
Eight builders will be selling homes in the Sendero project, offering from 1,000-square-foot town homes to 3,000-square-foot detached houses. Also planned are 287 apartment units and a 10-acre retail plaza. Builders have already put in recreational facilities, including several parks, clubhouses, swimming pools, spas, hiking trails, bocce courts and a putting green.
Sendero opened to the public at large at the end of June. The developers expect homes to sell at a pace of about 300 a year.
A distinguishing factor of the Sendero project is one segment called Gavilan, which is reserved for those age 55 and older. Overall, roughly 40% of the Rancho Mission Viejo project will be reserved for the “active adult” market: those baby boomers who appreciate recreational facilities such as bocce ball courts and single-story homes.
Stan and Angela Sokolove are two of those buyers. The couple plans on ditching the condominium life in San Diego for a two-bedroom, one-story home with a second-floor loft space designed by builder Standard Pacific Homes.
They recently put down a deposit and signed the first round of paperwork for a model with a base price of $577,000, — which will rise after adding some upgrades that should include lighting and finishing that will give the home a contemporary look.
Attracted by the inter-generational schema of the development and all the already-built social spaces in the project — bocce ball courts, pools, a putting green and cocktail bars — the Sokoloves hope to move in October.
“It really is going to create a sense of community that we don’t have in downtown San Diego,” Stan Sokolove said. “The opportunity for connecting with people will be really strong.”
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