MANY HOME BUYERS ARE leaving the exorbitant prices of Southern California in search of more affordable places to live, either cashing in on their current properties and moving up or simply trying to become homeowners. Frank Faye is positioning his company to answer their call.
Case in point: Long-dormant plans to develop a major master planned community in one of California's least expensive housing markets have sprung back to life with Sun-Cal Cos.' April acquisition of the 2,070-acre McAllister Ranch in Bakersfield from Jas-man Development, which had been unable to get utilities to the property.
One of California's largest developers, SunCal, has had its eye on the Bakersfield market for some time. The area, says Faye, who is president of the developer's Los Angeles/Ventura division, is “enjoying a renaissance that's blending the charm of its history with opportunities for the future.” So when the chance to grab such a prize as McAllister Ranch presented itself, the company moved quickly.
HOT PROPERTY According to DataQuick, a real estate information company based in San Diego, the median price for all homes—new, existing, and condominiums—sold in Bakersfield in April 2005 was $235,000. That's only slightly higher than the $215,000 median for all of Kern County. But it is way, way below the $445,000 median for the six-county Southern California region that includes Los Angeles, Orange County, San Diego, Riverside, San Bernardino, and Ventura.
The ranch “may attract people ready to leave other areas,” Faye adds, “but I doubt we'll get too many” commuters from the Los Angeles area.
“We spent about four years analyzing the entire Kern County market and evaluating whether or not we wanted” to be there, says Faye. “Our view was that our first project needed to be the ‘right one' [and] because we wanted to do more [projects in the county], the first one had to be successful.”
Though McAllister was not for sale four years ago, SunCal had the ranch at the top of its list of properties in the area because, according to Faye, it had the location and size that makes it perfect for a superior master planned community.
SunCal would not reveal what it paid for the property, which has been entitled since 1993, but Faye did say that the company probably won't create as many lots as are approved for the project.
Though the ranch is entitled for 9,000 houses, SunCal is likely to rework the plan down to about 6,000 units, according to Faye. While market conditions could change, he explains, the original plan calls “for a tad more density than we think the market wants today.”
Learn more about markets featured in this article: Los Angeles, CA.