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Orange County’s homebuilding industry reversed a long-running streak of declining sales last year thanks to a big boost in construction on Irvine Ranch land.
The county’s 31 largest homebuilders sold 1,989 new homes and condominiums in 2010, a 35% increase from a year earlier, according to this week’s Business Journal list.
Data for this year’s list was provided by the Costa Mesa offices of Washington, D.C.-based Hanley Wood LLC.
The past year saw the first year-over-year increase in total sales for the companies on the list since 2004, when the largest builders here sold more than 4,700 homes.
Since then the area has seen a steady decline in annual sales of new homes and condos. The market bottomed out in 2009, when the list of biggest homebuilders combined for just 1,477 total sales.
New home sales here regularly topped the 10,000 mark in the mid-1990s. As many as 15,000 deals a year was the norm in the late 1980s.
Last year’s improved results still aren’t anywhere near those high-water marks, and the gains left the industry with a third-consecutive year below the 2,000 mark—a streak unlike any in recent memory.
But builders likely aren’t complaining. Newly constructed single-family homes and condos saw sizeable increases in sales last year.
There were 981 new single-family home sales here by companies on this year’s list, a 54% increase from a year earlier.
Sales of condos and townhomes rose more than 20% for the year, to 1,008, according to this week’s list.
Condos Still Lead
2010 marked the fifth year in a row that sales of new condos and townhomes have outpaced detached houses, although the gap narrowed.
Newport Beach’s Irvine Company is responsible for the bulk of the area’s new sales in 2010.
The company launched its 2010 New Home Collection early last year with hopes of selling about 700 homes at its Woodbury, Woodbury East and Stonegate East projects in Irvine over a two-year period.
Sales have far outpaced those projections, by all accounts making the developer the envy of California’s homebuilding industry.
Irvine Co. reports about 1,200 sales on its land since the start of 2010.
Officials for the developer also recently announced plans to start building 2,600 more homes on land it owns this year, which should result in rising local sales for the next year or two.
At least half of the total sales in the county last year appear to be from Irvine Co. projects and the impact of the developer’s decision to begin building again in earnest can be seen across this year’s list.
Seven of the 10 busiest builders in the county last year did all or part of their local sales on land owned by Irvine Co. near the El Toro Marine base. The sales came from a range of projects running from condos starting at about $300,000 to bigger, stand-alone homes topping the $1 million mark.
Builders taking advantage of buyer interest in Irvine included the local division of Fairfax, Va.-based Brookfield Homes Corp., which moved up four spots to the No. 1 position on this year’s list.
The company, which built in a pair of Irvine subdivisions—Woodbury’s Montecito and Woodbury East’s Monterey—reported selling 227 homes here last year. Those projects nearly doubled Brookfield’s 2009 activity.
Through September, sales in OC represented about half of Brookfield’s total companywide sales in 2010, according to the builder’s regulatory filings. In addition to Irvine, Brookfield is selling homes at a pair of projects in Anaheim’s Colony District. It also sells elsewhere in California and in the Washington, D.C. area.
The average sale of a Brookfield home sold here during the first nine months of 2010 cost about $460,000, according to regulatory filings.
Riverside’s Van Daele Homes, No. 4 on this year’s list with 172 sales, is working on three projects on Irvine Co. land, and also has a smaller development under way in Lake Forest.
Van Daele is the highest-ranked of 10 builders that were newcomers on the list. Five of those new entrants were among the 15 most active builders here last year.
Of the 21 builders that were repeats on the list from last year, 12 posted an increase in year-over-year sales.
Projects Up 13%
All told, builders on this year’s list worked on 94 active local projects last year, up about 13% from 2009.
Other high-ranking new entrants to this year’s list include No. 9 Tri Pointe Homes of Newport Beach and No. 15 New Home Co. of Aliso Viejo, whose chief executive is former John Laing Homes CEO Larry Webb.
Both New Home and Tri Pointe got their start on Irvine Co. land, as did No. 10 Irvine Pacific LP of Newport Beach (see related story, page 18).
Irvine Pacific is the recently relaunched builder division of Irvine Co., and is expected to be one of the region’s most active builders for the next few years.
The most active seller not involved in any Irvine projects was Shea Homes, No. 3 on this year’s list with 176 sales reported.
The company, part of Walnut-based J.F. Shea Co., had held the No. 1 spot on the prior year’s list. Despite the drop in ranking, its year-over-year sales actually went up 7%, a sign of increased activity for local firms.
Shea Homes has projects in La Habra, Brea and Aliso Viejo, where sister company Shea Properties is headquartered,
The biggest new entrant to this year’s list not involved in Irvine Co. projects is Seal Beach-based Olson Co. The company builder reported selling 61 homes here last year in Fullerton and Garden Grove, good for the No. 11 spot.
No. 2 on the list for the second year running is Miami-based Lennar Corp., which runs its day-to-day operations from offices in Aliso Viejo. Lennar sold a total of 192 homes and condos here last year. The company had the most active projects—16—of any builder here last year.
In addition to working on Irvine Co. land, Lennar also began selling again at its Central Park West development near John Wayne Airport, which had been mothballed for a few years.
Lennar sold 143 condos and townhomes, the most of any builder on this year’s list.
No. 5 KB Home of Los Angeles was the busiest seller of single-family, detached homes, with 142 sales.
Lennar is part-owner of Aliso Viejo’s Five Point Communities LLC, which is hoping to move ahead with home sales at its Great Parks Neighborhoods by 2013. A number of other builders also are expected to be used for that project, which could see nearly 5,000 homes built and sold within eight to 10 years.
See related Special Report stories >