After a long fall, Antelope Valley is back on upswing


In the brutal cycles of California real estate, the Antelope Valley has been among the last to boom, the first to bust and the slowest to recover.

But in the High Desert, separated from downtown Los Angeles by 65 miles and a mountain range, the housing market is finally gaining steam after the latest debacle, underscoring the strong recovery across the region.

The reason is simple: Big new houses are selling in the $200,000 range, a mere fraction of home prices across much of the region. And that’s driving a stream of home buyers priced out of markets farther south. Builders have followed the demand, buying up and reviving the unfinished subdivisions that were abandoned during the crash.


Cliff Neves, an ironworker who helped build the Walt Disney Concert Hall in downtown L.A., is among the newest arrivals. The 36-year-old said he moved from the San Fernando Valley with his wife and children. He bought a new four-bedroom home in Palmdale last summer for about $190,000.

“I am not paying $250,000 for a bucket,” he said between drags of a cigarette while standing in his garage.

Such cost-conscious buyers once propelled the valley’s largest communities, Palmdale and Lancaster, into the ranks of the nation’s fastest-growing cities. And their return belies some of the more dire predictions about far-flung suburbs in the wake of the housing crash. Some observers — including Yale economist Robert Shiller, famous for predicting the crash — have speculated that exurbs like the Antelope Valley may never fully recover.

Still, at least for now, rising prices and a desperate shortage of houses for sale across Southern California are again making the Antelope Valley a haven of affordable real estate. Even here, after a vicious wave of foreclosures, inventory has now tightened and prices have jumped.

The median price for all homes sold in Lancaster during the first quarter jumped 17.5% to $141,000 compared with the same period last year, according to DataQuick. In nearby Palmdale, the median price rose 10.7% to $155,000.

“The darker days are behind us,” said Mark Troth of Prudential Troth Realtors in Lancaster, recalling boarded-up homes and dead landscaping.


To be sure, the region continues to face long-term challenges, particularly in stabilizing its boom-and-bust cycles. As this new wave of bargain seekers heads north over the mountains, the question is whether transplants will continue to arrive in large numbers, boosting home construction and the local economy.

With rising gas prices, commutes of more than an hour become more than a headache. And many experts say younger home buyers, and even some older ones, now place a premium on walkable neighborhoods and speedy commutes.

“The future in those areas is very uncertain,” Tom Murphy, a senior resident fellow at the Urban Land Institute, said of the nation’s far-flung suburbs.

The nation’s cities — many, including Los Angeles, boasting revitalized downtowns — have increasingly become a focus for growth. From July 2010 to July 2011, the nation’s largest cities, in general, grew faster than their suburbs for the first time in more than nine decades, according to an analysis of U.S. Census Bureau data by the Brookings Institution.

That’s a big change from the 1980s, when the Antelope Valley, an aerospace hub, boomed on the strength of Reagan-era military spending and skyrocketing home prices across Southern California that pushed thousands out of the cities into cheaper, outlying suburbs such as Palmdale and Lancaster.

But the early-1990s recession and California housing crash put on the brakes. Decreased military spending took away many aerospace jobs; falling home prices across Southern California gave buyers other options for affordable housing. Many new homes that builders had raced to put up in the valley remained vacant.

During the last decade’s housing boom, another large wave of families seeking affordable housing arrived in the Antelope Valley, scooping up homes made all the more attainable by easy-money mortgage lending.

When the bubble burst, prices in the Antelope Valley once again fell further than most. Median prices plummeted about 70% in Palmdale and Lancaster, and borrowers defaulted en masse. During the first three months of 2009, foreclosed homes made up nearly four-fifths of homes resold in Lancaster and Palmdale, according to real estate information firm DataQuick.

“Some of these neighborhoods did not look well,” Troth said.

But many of the distressed properties have been sold off. In the first quarter of this year, foreclosed homes made up 25.5% of all resales in Lancaster and 25.9% in Palmdale.

The improving market has caught the attention of developers. Half a dozen previously stalled Lancaster subdivisions should be completed by the end of the year after builders took advantage of a city program that reduced building fees, said city spokesman Joseph Cabral.

Behind Neves’ Palmdale home, rows of graded dirt lots flanked completed streets. The smell of wood filled the air one recent morning as a construction worker swung his hammer again and again on a wood-framed house, part of a new development by Harris Homes.

The developer is being cautious, putting up about 10 to 15 homes at a time — and raising prices with each phase, said Andrew Fisher, the exclusive broker for Harris Homes.

“The market is steadily improving,” he said. “We are building much more aggressively than we were a year ago, but we are not going to get ahead of ourselves.”

Builders will probably put up about 25% more new homes this year than last in the Antelope Valley, said Marta Golding Brown, the Antelope Valley director for the Building Industry Assn. of Southern California’s Los Angeles-Ventura chapter.

But the number of housing starts last year, 323, still pales in comparison with the 3,600 units started in the area in 2006, according to real estate data provider Metrostudy.

In February, developer KB Home held a grand opening for its east Lancaster neighborhood Dorado Skies, a formerly stalled subdivision the Los Angeles builder is restarting. Prices for the four- to six-bedroom houses run in the mid-$200,000s. KB is actively marketing homes in three other communities in Lancaster.

Sheldon Sutherland and Michelle Leiva came to Dorado Skies from South Los Angeles. The couple reserved a lot, looking for more space and a safer neighborhood.

Sutherland, a records manager for a law firm in Pasadena, said he has battled in the Antelope Valley’s resale trenches, fighting for the few available homes. “It’s just a bidding war to get those homes,” he said, adding that his agent told him people flush with cash beat him out.

Now, the 34-year-old has his eyes set on a new home, attracted by a solar panel package, more space and the knowledge that no fixing-up will be needed.

“You get more for your money,” he said.

Lancaster is also hoping to make its communities more pedestrian-friendly. Last month, the City Council revised its residential zoning ordinance to provide incentives for infill development and to require developers to include pedestrian and bicycle connections to nearby amenities.

Lancaster Mayor R. Rex Parris said residents’ long commutes concern him, adding that he knows hundreds of families who endure debilitating treks to the office.

“The mother and father spend most of their productive hours on the freeway,” Parris said. “It’s just not a good way to live.”

In 2011, 16% of Lancaster’s working population traveled an hour or more to their jobs. In nearby Palmdale, 30% traveled that long, according to the U.S. Census Bureau’s American Community Survey.

The Antelope Valley, he said, needs a sustainable jobs recovery more than another building boom. The Lancaster unemployment rate was 14% in March; in neighboring Palmdale, it was 12.3%.

Parris is working to attract more manufacturing operations as part of a larger effort to create a more sustainable economy, with fewer commuters. Gov. Jerry Brown announced this month that Chinese electric vehicle maker BYD will open a factory in Lancaster.

Palmdale Mayor Jim Ledford expects that a high-speed rail stop planned for Palmdale will ease commuting, and that Los Angeles-area residents will remain attracted to the Antelope Valley.

As prices continue to rise in Los Angeles, even more will come, drawn once again by a more affordable home in a quieter neighborhood, Ledford said.

But without more jobs closer to home, the Antelope Valley remains vulnerable to future boom-and-bust cycles.

“I don’t see doomsday, but I do not see the quality community I am hoping for,” Parris said. “You used to be able to afford to commute. Now you can’t. What good is it to have a cheaper house if you can’t afford to get there?”