All 20 homes in a small project along the Santa Ana River in Anaheim have gone into escrow in just five months.
The Lakehouse community by Brandywine Homes sold four-bedroom residences at an average price of $790,000. Move-ins start as soon as March.
The quick sale is part of a growing market for new homes. Brandywine, for example, saw companywide sales across Southern California grow to 116 last year from 40 in 2015.
“The new home market in Orange County continues to be strong, driven by an expanding job market, historically low interest rates – still – and an overall shortage of housing,” says Dave Barisic, Brandywine’s marketing chief. “As long as these factors stay in place, we do not see a change in this market in the foreseeable future.”
Orange County homebuilders collectively sold 4,690 new homes last year, up 29 percent vs. 2015 and their best year since 2006. Developers grabbed 12.4 percent of all sales vs. 9.9 percent in 2015 – builders’ highest local market share since 2007.
Some of that success may be due to some relatively moderating pricing.
The median new-home selling price in 2016 was an eye-catching and budget-busting $830,000. But it was down 1 percent from 2015 and “just” 29 percent above the countywide median price. In 2015, new homes were 38 percent above overall pricing.
And it doesn’t hurt that builders have supply to sell while the inventory of existing homes for sale runs one-fifth below historical norms.
In the third quarter, builders had completed or had under-construction inventory of 1,127 housing units, double the supply of 15 months earlier and back at levels last seen as the market slowed before the recession.
The region’s developers also are getting national attention.
The Irvine Ranch sold 1,989 homes last year, making it the fastest-selling master-planned home community in the nation, according to RCLCO. Great Park Neighborhoods in Irvine, ranked eighth, with 530 homes sold last year; Rancho Mission Viejo in South County ranked 14th with 458 sales; and Baker Ranch in Lake Forest ranked 17th, selling 443 homes.
The challenge for developers this year will be navigating a tougher climate.
Competition among builders and existing homes will be stiff, especially for residences priced anywhere above the mid-range. House-hunter budgets will be thinned by higher mortgages rates, putting pressures on pricing. And construction costs should rise, with shortages of labor and certain supplies looming.
But as long as current homeowners largely stay put and Orange County bosses extend their six-year hiring spree to a seventh in 2017, builders should find a way to have another solid year.
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