Housing Lot Sales Surged in January
By DANIEL D. WILLIAMS
Homebuilders snatched up entitled lots at a record pace in January, according to one land brokerage firm.
O’Donnell/Atkins Co., a Costa Mesa-based land brokerage, said it handled eight land deals last month worth more than $123 million as homebuilders bet on continued strength in the housing market here and in the Inland Empire.
“We’ve never seen this happen in January,” said Craig Atkins, a partner at O’Donnell/Atkins. “Typically, you have your strongest sales at the end of the third quarter.”
About $90 million worth of the land sales, or 479 lots, were in Orange County, Atkins said, with the rest in the Inland Empire. The firm’s overall activity is double that of the year-ago period, he said.
“The feedback from the building community is that the demand is still high for the first-time and move-up market,” Atkins said. “The quality locations are still commanding a premium price.”
Pulte Homes, D.R. Horton, Kaufman & Broad and Centex Homes bought at least 70 lots each in the Serrano Heights area near Orange from Anaheim-based SunCal Cos., Atkins said. D.R. Horton also bought 77 lots from Toll Brothers Inc. and Shell Oil’s Vista Del Verde near Yorba Linda, he said.
“We’re still buying because we believe the confidence level is still there,” said Rachel German, a representative in the sales and marketing department of D.R. Horton’s Corona office. “Plus, we want to improve our sales this year over last year and we need the land to start building.”
The uptick in land buying reflects the notion that the economy is in the final throes of the slowdown, according to John Burns, president of Irvine-based John Burns Real Estate Consulting Inc.
“Buyers want to buy at the end of a down cycle, not at the beginning,” he said.
Several homebuilders reported strong sales of new homes last month. According to Burns, the consensus among homebuilders is that if houses are selling well during a slowdown, they should sell like hotcakes if the economy rebounds later this year.
“Builders are loading up on lots in anticipation of developing next year or even the next year,” Burns said. “They don’t mind holding onto the land because they don’t think housing prices will go down.”
Burns said he sees a built-in demand locally, even without new growth here.
“Each year we have 7,000 residents converting from renting to owning, meaning there is a built-in demand even if no one else moves into Orange County,” Burns said.
