The Irvine Company’s initial foray into home building met with considerable buyer enthusiasm last weekend, when more than 10,000 people toured models for its “2010 New Home Collection,” a series of 25 floor plans in eight neighborhoods within the developer’s massive Irvine Ranch master plan. Six California-area builders are being paid construction fees to build this series as part of the Irvine Company’s Executive Builder program.
More than 600 prospects were bank-qualified before this event took place, and all but one of the 71 homes that were released for the grand opening had been presold. That represents the largest number of new-home sales at Irvine Ranch in four years, and the value of those homes exceeded $40 million. (The developer chose not to transact sales during the grand opening weekend, according to its spokesman John Christensen.) Before the event, activity on the developer’s Web site was 10 times to 15 times higher than normal, said Daniel Young, Irvine Company’s president of community development.
“We printed 2,500 price sheets and handed all of them out by Sunday afternoon,” says Larry Webb, a partner with The New Home Company, one of the builders working with Irvine Company. As of Tuesday afternoon, his Newport Beach, Calif.-based company, which incorporated only last September, had contracts for 11 of the 12 homes it released for sale.
Webb says that his company held an invitation-only reception last Friday for about 200 buyers, and he talked personally with 50 of them. “To a person, they are looking for a new home in this specific master plan, and [they] are attracted to the schools, the parks, and the newness of the houses.”
Indeed, Irvine Company has framed its latest grand opening as nothing less than a major shakeup of a moribund housing market. “Pent-up demand has been waiting for us,” Young told the OC Metro magazine. In an interview with the Orange County Register, Young added “there hasn’t been new home building [in Orange County] in three years. We think this demand is organic.” And in a prepared statement, Young asserted “[t]he reality is that if the Irvine Company did not take this leadership role, we would not see new home construction in Irvine before 2011.”
In response to the grand opening turnout, the developer released another 56 homes for sale. All told, Irvine Company has allocated 685 lots for the series’ buildout, which is expected to take two years to complete. (Webb says that The New Home Company will build about 70 homes in six phases over this period.)
Irvine Company is making its 2010 New Home Collection series available in subdivisions of Irvine Ranch called Villages of Woodbury and Woodbury East. The builders—Lennar, KB Home, Brookfield Homes Southland, TRI Pointe Homes, and Val Daele Development, along with The New Home Company—are constructing 1,060- to 3,250-square-foot houses that range from one- and two-bedroom townhomes and flats. Prices start in the low $300s to four- and five-bedroom single-family homes starting in the low $900s.
“I’ve been a bit surprised at how across-the-board demand has been,” said Young. “The $300,000 homes have caught people’s attention, but we’re seeing nearly as much interest” in the pricier models. The New Home Company’s three models are the highest priced in the series, but also the only homes being built on “normal” sized (50- by 80-foot) lots with front-loaded garages.
Customer input appears to have played a big role in helping the developer shape the home design for this Collection. Irvine Company spent two years talking to buyers about what they wanted in a home. The effort included arming more than 200 potential buyers with clipboards and asking them to grade existing homes at Irvine Ranch. The developer then took cameras into many of those houses and interviewed their owners about what they did and didn’t like about them.
The results are homes with open interior designs where spacious great rooms, kitchens, and outdoor spaces known as “California rooms” flow seamlessly into one another. The designs also give more breathing room to bedrooms and storage.
Young said that while housing demand in certain parts of the country might still be depressed, “we’re starting to see regional markets reopen.” Consequently, Irvine Company is planning other communities, which he stated might open “sooner than we thought; actually quite soon.” Young also said Irvine Company would continue its Executive Builder program—where it’s financing the construction of the houses on lots it owns and develops, and is paying builders construction fees—beyond this phase of the 2010 New Home Collection buildout.
Webb says his company already has had preliminary discussions with the developer about being one of the builders in those new subdivisions.
John Caulfield is senior editor for BUILDER magazine.
Learn more about markets featured in this article: Los Angeles, CA.