In late June, two builders announced development on projects in the strong Southern California market. On June 23, Brandywine Homes announced that it had begun demolition on an 18-unit apartment project in Costa Mesa to eventually build 26 townhomes.
A week later, Presidio Residential Capital announced it had partnered with Williams Homes to build Phantom Trail, to build 29 single-family homes in Santa Clarita, Calif. Construction will begin in the spring of 2015, and a grand opening is planned for November 2015.
Both developments fill a need for supply in the hot Los Angeles market, which saw new and existing home closings fall in the first quarter but a 23.7 percent price increase over the first-quarter of 2013.
Lot supply has become a big issue in the high-barrier-to-entry market, hurting supply. But job concerns could also affect demand. Here’s the Metrostudy commentary:
The dramatic price appreciation in the Los Angeles market is met by a dip in the months’ supply of Vacant Developed Lots (VDL). VDL supply for the [Los Angeles] MSA dropped from 14.9 in 1Q13 to 11.2 in 1Q14. Finished housing supply, however, is up to 11.8 and 10.5. VDL, under construction, and finished months’ supply all remained stagnant between the 4Q13 and 1Q14. Los Angeles has also been enduring unemployment rates far higher than the national average at a preliminary 7.0% in April versus the national average of 5.9% (not seasonally adjusted) for the same month. Job security concerns might additionally impact newly formed households, possibly delaying their decision to buy a home. Here is more on the two new developments:
COSTA MESA, Calif. – June 23, 2014 – Brandywine Homes, a pioneer of infill development in Southern California, has acquired a 1.42-acre property in Costa Mesa and plans to build a 26-unit townhome community. Demolition of the existing 18-unit apartment complex and construction of the new townhomes will begin immediately. This new townhome community is expected to be completed by fall 2015, with the first homes becoming available for sale in February 2015.
The property at 2013-2029 Anaheim Avenue is in a quiet residential area just northeast of Triangle Square Mall and the bustling retail area along Newport Blvd.
“This townhome community is located just two miles from the beach and Pacific Coast Highway and less than a mile from the 55 freeway,” said Dave Barisic, vice president of sales and marketing at Brandywine Homes. “With easy access to vast amenities, restaurants and entertainment, the lush, landscaped gated community will offer a quiet, peaceful environment for residents with large private yards and a community pool.”
Brandywine Homes will offer two different floor plans for two-bedroom, two-and-a-half-bath townhomes with living spaces of 1,599 square feet and 1,727 square feet. All of the units, designed for cost efficiency and maximization of living space, will have attached garages. The property is located in a residential area with multifamily housing to the north, south and west and single-family residential to the east.
SANTA CLARITA, Calif. – June 30, 2014 – Presidio Residential Capital has partnered with Williams Homes to build Phantom Trail, ultimately a $25 million 82-acre community with 29 single-family homes and more than 70 acres of dedicated open space near Copperhill Drive and Haskell Canyon Road in the city of Santa Clarita, Calif. Construction will begin in the spring of 2015, and a grand opening is planned for November 2015.
“Presidio is excited to partner with Williams Homes on this project,” said Presidio Residential Capital principal Paul Lucatuorto. “Although the property encompasses 80 acres, Williams is planning to develop only 29 homes on 20 acres with a private neighborhood park, creating an exclusive enclave with amazing views of the surrounding area.”
Phantom Trail will be located within a highly desirable submarket for buyers who are looking for new homes with bigger-than-average lots within a safe community and outstanding schools. Buyers will be able to choose single-story homes if desired, will enjoy outstanding regional views and will have enough room for a pool and other amenities, all of which is rare in the Santa Clarita market.
The homes, on 7,750- to 16,780-square-foot lots, will have ENERGYSTAR® appliances, standard granite kitchen countertops and 10-foot ceilings on the first floor. Residents will have access to a large park within the subdivision. The site is near major employers including the William S. Hart Union School District, Six Flags Magic Mountain, Princess Cruises, College of the Canyons and Henry Mayo Newhall Memorial Hospital. With easy access to the Metrolink, Santa Clarita Transit and the Burbank Bob Hope Airport, Phantom Trail is also close to the Valencia Town Center and Patios shopping centers as well as Hurricane Harbor, Lake Castaic and Santa Clarita State Park.
“Williams Homes specializes in developing infill properties in Los Angeles County that are not mainstream opportunities for the big builders, and this particular property meets those requirements,” said Keith Herren, chief development officer and executive vice president of Williams Homes. “The property has a lot of terrain, which concerns most builders, but we believe the risks are easily quantifiable and manageable. The property is also smaller than what most big builders are looking for, but we actually like the smaller bites.”
According to the National Association of Home Builders’ formula to determine the local impact of single-family housing in typical metro areas, the community’s 29 new single-family homes will generate $6.1 million in local income and $638,000 in taxes and other revenue for local governments and 94 local jobs.
“We chose this project because of the property’s location within a large master planned community,” Lucatuarto said. “It’s rare to find new homes on large lots with home prices starting in the $600,000s that are within commuting distance to Los Angeles employment centers.”
Williams Homes is the general contractor for Phantom Trail. Phantom Terrace Associates is the seller, and Howard Hamlin is the broker.
Learn more about markets featured in this article: Los Angeles, CA.