Several Orange County-based homebuilders’ recent effort to expand operations into the Inland Empire appears to be at an opportune time in the market cycle, according to a new report by Irvine-based John Burns Real Estate Consulting.
This month the consultant to homebuilders, land developers and others in the housing industry listed Riverside and San Bernardino counties as the No. 3 housing market in the country in terms of supply-and-demand and new-home construction.
The Inland Empire trailed only Seattle and Dallas among U.S. markets and was just one of seven regions viewed as “very strong.”
OC ranked No. 28 with what John Burns called a normal state of housing supply and demand. San Diego County was No. 6, Los Angeles County No. 24.
The Inland Empire “has finally emerged from the last downturn as a hot epicenter of home buying activity,” said Kate Seabaugh, research manager for the consultant.
“Demand from commuters to coastal job centers remains robust, boosted by rising Asian buyer appeal that has recently been fueled by nonstop China Airlines flights between Taiwan and Ontario,” the report said.
In prior housing cycles, Riverside and San Bernardino counties have “had a tendency towards oversupply, but we don’t see this happening as single-family permit volume still sits 75% below prior peak,” Seabaugh said.
Of the top seven markets, the Inland Empire is forecast to have the strongest new-home growth over the next two years: 46%.
Local builders seem to be taking notice.
This month, William Lyon Homes completed its $460 million buy of fellow Newport Beach-based builder RSI Communities, which focuses on more affordable and entry-level homes.
About 29% of the 11,128 home lots RSI owned or controlled at the time the deal was struck were based in the Inland Empire. The company’s Southern California operations will become an Inland Empire division of William Lyon Homes led by Pat Donahue as Inland Empire division president.
In Southern California, “our projects in Inland Empire continue to perform exceptionally well, targeting both the entry level and first-time move-up buyer segments,” William Lyon Chief Executive Matthew Zaist said in February. The region already represented about half of its Southern California deliveries in the fourth quarter, before the RSI deal.
The area “performed incredibly well during the past 12 months and [sales] are off to a great start in 2018,” Zaist said. Most of the company’s offerings in the Inland Empire cost $350,000 to $600,000.
Aliso Viejo-based New Home Co. is targeting the region as it plans more affordable homes for its stable of high-end offerings.
Its 75-home development in Ontario’s Park Place community will go on sale this year, and it’s master developer of the 275-acre Bedford project in Corona.
“We think we have a lot of growth opportunities in the Inland Empire,” Chief Executive Larry Webb said last month.
Irvine-based TRI Pointe Group Inc. delivered nearly 500 homes in the Inland Empire last year, and has big plans on tap for this year. “It’s a market that we really dominate,” Chief Financial Officer Mike Grubbs said last month.
Oxnard Rentals
Bascom Group LLC has made its latest apartment acquisition in the Ventura County city of Oxnard.
The Irvine-based investor said this month that it paid just under $75.3 million to buy Tempo at Riverpark, a 235-unit infill apartment community.
The property sold for $320,213 per unit. Bascom didn’t disclose the seller; 2016 news reports said the property was owned by a venture between the Wolff Co. in Scottsdale, Ariz., and New York-based Silverfern Group.
The high barriers to multifamily development in Oxnard “have created a limited apartment supply in a high-demand housing market that is experiencing strong growth,” said Bascom Vice President James Singleton in a statement.
Bascom said it’s spent more than $1 billion on apartment buys in the past year. It owns nearly 19,000 apartments across the country.
