The decline in new-home sales that started three years ago in Orange County picked up speed in 2005, as dwindling open space continued to hinder homebuilding.
OC’s top 30 homebuilders sold 3,297 houses and condominiums last year, down 30% from 2004, when the 30-biggest homebuilders sold 4,706 homes and condos.
Home sales by the largest OC homebuilders were down 25% in 2004 from the previous year.
Sales were as high as 10,000 homes and condos in 1997. In the 1980s, 15,000 units sold per year was the norm.
Data for this year’s list of top builders was compiled by the Costa Mesa office of Washington, D.C.-based Hanley Wood LLC.
|
|
Home prices have surged during the past few years. The limited number of new homes, continued strong job growth in OC and low interest rates are largely responsible for rising home prices locally.
The median price of new and existing homes sold in the county reached a record $621,000 in December, according to La Jolla-based market tracker DataQuick Information Systems. The median fell 6.3% to $582,000 in January, with a 10.6% decline in sales to 2,594.
The decline in new-home sales is chalked up to the relative lack of large projects in the county, as well as a limited supply of developable land. It’s not due to a lack of demand, homebuilders said.
Major developments, such as Talega in San Clemente and Ladera Ranch, are largely complete.
Buying interest is expected to remain solid in 2006, homebuilders said.
“We’re still seeing strong traffic numbers at our sales sites,” said Dave Prolo, senior vice president for the Newport Beach office of John Laing Homes, part of WL Homes LLC. “Maybe it’s not like it was six months ago, but they’re still buying. We’ve started this year, like last year, with cautious optimism.”
Last year’s results could be seen as a lull before a pickup. A number of larger developments in Irvine, Anaheim and Tustin have yet to kick off sales or are just beginning.
John Laing Grabs Top Spot
No. 1 John Laing Homes moved up three spots on the list to grab the top ranking.
John Laing sold 658 units last year, including 432 detached homes. That’s 94% more than a year earlier. The results give John Laing 11.3% of the local market.
The homebuilder also led the list in number of OC projects, with 18 under way last year. It has a big presence on the Irvine Ranch, as well as in Anaheim, San Clemente and Seal Beach.
John Laing sold the most expensive homes here last year. Nearly 400 of its sales were for homes costing more than $700,000.
Meanwhile, the builder was the only one to sell units costing less than $100,000. John Laing sold 33 affordable-housing units at its Tustin Legacy project.
Last year’s No. 1 builder, Standard Pacific Corp., showed a 17% drop in local sales. But the Irvine-based homebuilder posted enough sales to notch the No. 3 ranking this year, with 488 homes and condos sold.
Standard Pacific saw a 7% drop in detached units, as well as a 39% drop in attached units.
Fort Worth, Texas-based D.R. Horton Inc. showed the biggest drop in ranking. It fell from No. 2 to No. 18 in 2005.
The homebuilder sold 71 mainly detached homes here last year. That’s down from 342 sold in 2004, which was off 43% from 2003. The company’s local market share has declined to 1.2% from 9.2% during the past two years.
For the top 30 homebuilders, the total amount of detached units sold dropped 28% to 2,068 from a year ago.
Condo Sales Mixed
Despite more attention on condo development, and more urban-type living in OC, 2005 showed little growth in condo sales.
There were 1,229 attached units, which include both condos and town homes, sold by the top 30 homebuilders in 2005. That’s a 32% drop from 2004, when 1,820 units were sold. The 2004 results were off by 7% from a year earlier.
Several companies posted brisk sales on the condo front.
Newport Beach-based William Lyon Homes Inc. sold 416 attached units in 2005, including 296 condos,the most of any builder on the list.
William Lyon also sold 231 homes, boosting its OC total sales by 90% to 647. The gain pushed William Lyon into the No. 2 spot.
Similarly, Phoenix-based Opus West Corp. saw its local unit, OWR Development in Irvine, ramp up condo sales at its Plaza-Irvine high-rise project along Jamboree Road. It’s building condo towers with partner Geoffrey H. Edmunds & Associates Inc. of Scottsdale.
With 158 sales at the twin towers, which are under construction, Opus jumped 10 spots to No. 10 on the list.
One former high-flying condo developer fell off the list in 2005.
Vancouver, British Columbia-based Bosa Development Corp. was No. 11 in 2004, with 149 sales at its two Park Place condo towers in Irvine. But it notched no sales in 2005 after its Park Place towers sold out.
Look for a Bosa return.
Late last year Bosa paid $40 million for 6.5 acres at Park Place in Irvine. Bosa has an eye to put up four more condominium towers.
What to Watch in ’06
Lennar Homes California in Aliso Viejo moved up two spots to No. 6 on the list on sales of 259 units last year, up 1% from 2004.
A number of projects for Miami-based Lennar Corp. are in the works. They’ll start bearing results for the company in the coming years.
Lennar won bidding for most of the former El Toro Marine base last summer. The builder is paying about $1 billion for the land, where it plans to put up about 3,600 homes as well as office space, museums, wilderness areas and other uses.
Lennar expects the first homes at El Toro to finish in 2008.
At the county’s other former Marine base in Tustin, Lennar and William Lyon Homes have approval to build 2,000 homes.
Meanwhile, at Anaheim’s Platinum Triangle, Lennar’s plans call for 2,681 homes, including up to 14 condo towers. And at Central Park West in Irvine, 1,400 homes and condos are planned. Grading and other early-stage work has begun at both developments.
A homebuilder to watch: Los Angeles-based KB Home, which isn’t on this year’s list. The builder has plans for several local condo and home developments. The largest of its OC projects could total about 500 homes.
