IF ZIP CODE 90210 STANDS for California panache, then Area Code 909 speaks to the pejorative, at least to the folks who live on the long stretch of coastline from San Diego north to Los Angeles.
But not any more. The Inland Empire, the huge land mass long known disparagingly by its area code, or perhaps even worse, as IE, has grown up. And nobody is taking better advantage of that fact than developer Jim Previti of the Empire Cos.
“It's a different place today,” says Previti of the region where he first started building houses in the early 1970s. “The luxury market is getting stronger and stronger every day. People are sleeping in their cars to buy $650,000 homes.”
That wasn't always the case. In 1975, when Previti started Forecast Homes of Pamona—a company he would later sell to Hovnanian Enterprises for $320 million—the first two houses he ever built went for a whopping $29,950. But the New Jersey native, who came to Southern California fresh out of the Marines, knew he was on to something when the homes sold in just one weekend.
And it was only eight years ago that Previti's staff thought houses overlooking the lake and golf club might be able to fetch a whopping $300,000 … if they were lucky.
Previti wasn't convinced, though. “I warned them not to get too optimistic,” he recalls. Boy, was he ever wrong.
Although the golf course houses were originally penciled in to go for $250,000 at best, the asking price was up to $400,000 by the time the project opened. And now, with just 90 lots to go, places along the links are selling for as much as $800,000.
“That was an expensive house in the Inland Empire, even as recently as 2002,” he says. “Now, everything's more than $300,000.”
Driving For Dollars Well, not everything. The region is still considered a haven for first-time buyers, and companies such as Forecast, KB Home, and others continue to build starter homes. But they are being pushed ever eastward into the high desert and south to Temecula and beyond. And they are being replaced by high-end builders who can satisfy the huge demand for upper-income product.
“What used to be entry level is now for second-time buyers,” Mike Dwight, who now runs Forecast Homes for corporate parent Hovnanian, told a local newspaper recently. “Fifteen years ago, Ontario and Corona were to Orange County what Victorville has become to Ontario and Rancho Cucamonga.”
What's happening in the Inland Empire, which includes San Bernardino and Riverside Counties and stretches from the eastern edge of Los Angeles County toward Palm Springs and from northern San Diego County to the Mohavi Desert on the north, is not all that unusual. Indeed, it happens everywhere where land becomes scarce and, therefore, an expensive commodity. Buyers end up trading distance for dollars. But in this case, with the Pacific Ocean blocking any movement to the west, the exodus went east.
The first home buyers to migrate to the Inland Empire were those hungry for affordable places to live and raise their families. But now a higher-end emigration has begun.
Today, the region's population is about 3.6 million, which is larger than that of 24 states, according to Husing, whose firm, Economics and Politics, is based in Redlands.
Since 1990, roughly half the newcomers were people working in management and the professions, people who could afford expensive houses practically anywhere but on the Southern California coast. And as a result, the Inland Empire's residential real estate market has reached full maturity, the economist says.
“At every level, the lifestyle that can be purchased in the inland region is extraordinary compared to its coastal neighbors,” says Husing.
Looking Higher Previti, who built some 20,000 houses before he sold his company to Hovnanian in 2002, was one of the first in the region who realized the Inland Empire had reached maturity and took advantage of it.
Though Forecast was recognized in the region as the low-price leader, the builder decided to take a step up when he purchased the Eagle Glen property in the late 1990s. It was his second foray into building a master planned community—his first was in Folsom—and included a park, a school, a retail center, and a golf course.
Now operating under the Empire mantle, Previti is developing two more properties—the Retreat and Anaverde—that are even more pricey. “We have the income levels to support an upscale market,” he says.
Located in Corona, the 546-lot Retreat will be a private, gated community built around the region's first private golf course—in this case, a Jack Nicklaus–designed golf course—in two decades. Houses will start at about $800,000. KB Home, Prestige Homes, Beazer Homes, and Diversified Pacific, among other recognizable names, will each tackle a slightly different price point.
With 1,985 acres, Anaverde is far more ambitious. Even Previti thinks “we are raising the bar” for the region on this one. But, he says, “the time is right and the demand is there.”
The Palmdale property, once known as City Ranch, is fully entitled to include 5,200 houses in all price ranges plus five parks, three schools, a fire house and shopping center, and 650 acres of open space. It is a joint venture between Previti and KB, which sold a 51-percent share of the long-stalled project that was approved more than 20 years ago to the developer for $30 million.
KB will build on 400 lots in the first phase. Others who have acquired lots include Beazer, Western Pacific, and Richmond American. All of a sudden, Area Code 909 may at last be gaining cache.