Standard Pacific Tops OC’s Q1 Home Sales
By NIDAL M. IBRAHIM
Irvine-based Standard Pacific Corp. reclaimed the top spot as Orange County’s most prolific builder during the first quarter, recording 254 home sales and 13.2% of the local housing market.
Brea-based Shea Homes of Southern California, which was ranked No. 1 a year earlier, fell to No. 7 with 112 home sales, good for 5.8% of the market.
The numbers, from Costa Mesa-based market tracker The Meyers Group, provide an interesting look at homebuilding here in the quarter. The rankings can change dramatically from quarter to quarter based on who’s building where and the number of communities a builder has open for sale.
The most telling thing about the numbers: They show who’s cashing in on a hot housing market where lots to build on are hard to come by.
“We’ve continued to feel it’s important to have a strong market share in our home county, being based in Orange County,” said Todd Palmaer, president of the OC division of Standard Pacific. “We feel we know this market real well. If you looked overall at the past couple of years, we’ve been the market leader or No. 2 or No. 3.”
In all, the top 33 homebuilders here sold 1,921 homes in the quarter, up nearly 20% from the year-ago period.
The gain came despite a decline in the number of neighborhoods the builders were marketing in the quarter. They fell 13% to 108.
Availability of land continues to be key for homebuilders here,an issue that’s set to become even more critical as land dwindles.
The key for homebuilders: forging close ties with master developers such as The Irvine Company, Rancho Mission Viejo LLC and Sun Cal Cos.
Big homebuilders such as Standard Pacific and the local arm of Miami-based Lennar Corp. also have become master developers themselves. Standard Pacific and its financial partners are developing San Clemente’s Talega, a 4,000-home development on 3,510 acres.
Standard Pacific also has longstanding ties with OC’s major landowners, the Irvine Co. and Rancho Mission Viejo.
“We’re in a good, strong position,” Palmaer said. “We feel comfortable that we will be able to maintain our presence in that (No. 1) position over the next couple of years.”
With few exceptions, most builders reported fewer OC projects in the first quarter. Shea Homes, which marketed 15 projects in the first quarter of last year, was down to 10 in the first three months of this year.
Les Thomas, president of Shea Homes of Southern California, part of Walnut’s J.F. Shea Co., said the decline in his company’s OC sales was due to a lack of land to build on.
“It’s no surprise,” Thomas said. “We’re down because we’re not bringing much product to market right now.”
A lack of new OC projects for Shea is likely to continue through next year, Thomas said. He said he doesn’t see any change until 2006, when Shea’s work building homes at the former Tustin Marine base kicks in.
Another major project in Shea’s pipeline is in Tonner Hills, an unincorporated area next to Brea. Shea, in partnership with Standard Pacific, expects that development to yield about 750 homes. That probably won’t happen until 2006.
With less land to build on, Irvine-based Sares-Regis Group found another way to crack the hot housing market. Its Irvine-based Regis Homes unit didn’t register on the home sales ranking for the first quarter of 2003. This year Regis Homes ranked No. 6 with 124 sales, or a 6.5% market share.
The showing is thanks to one project: Seabridge Villas in Huntington Beach, which got converted from apartments to condominiums. Regis bought the apartment complex, which was approved with a plan for possible condo conversion.
Sares-Regis builds homes, apartments and buildings for businesses. As for homes, the company plans to go after projects in already developed areas, according to managing director Geoffrey Stack.
“It’s not been easy for us to do for-sale projects in Orange County,” he said. “We tend to do infill projects.”
Stack said he sees OC’s strong housing market holding, despite a Commerce Department report last week that national new home sales fell 12% in March due to higher interest rates.
“There is still very strong demand in Orange County and I don’t think that’s abated,” he said. “Not just Orange County, but in Southern California as a whole, there’s a lot of demand today. As the economy begins to grow and expand, there will be even more demand.”
Shea’s Thomas agreed.
“The market is fabulous right now,” he said. “With all the forecast right now for job growth in Orange County, and interest rates still at a historical low level, and with the population increasing, you’ve got this high demand. In the next several years, it looks like it’s going to be a pretty strong market for homebuilders in Orange County.”
