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Thursday, Apr 18, 2024

New Homebuilders’ OC Sales Up 9%

It was a tale of two markets for Orange County’s homebuilding industry in 2023.

Homebuilders with presences in OC’s larger master-planned communities by and large reported solid years for sales last year, while those with a larger focus on smaller, in-fill communities struggled to keep pace with prior years’ activity.

The top 14 builders in Orange County last year sold a cumulative 3,256 attached and detached homes in the area, according to this week’s Business Journal list of homebuilders. That’s up 9.3% from 2,979 compared to 2022.

Attached home sales rose 27% to 1,700, while detached home sales declined 5.1% to 1,556.

Not every builder on the list—which includes those with more than 45 new home sales in 2023—saw growth. A total of nine companies on the list reported year-over-year declines, with many seeing drops in sales of 50% or more.

Data for the list was provided by the Newport Beach-based real estate research firm Zonda, augmented by data from individual builders and the Business Journal.

High interest rates and limited buildable land across OC are the culprit for many builders.

Rates, which reached historic highs last year, have discouraged land sellers from transacting, according to Tim McSunas, president of Melia Homes, an Irvine-based infill builder that ranks No. 8 on the latest list.

Melia, which is currently selling homes at Townes at Broadway in Anaheim and Citrus Square in Cypress, saw a 5.3% decline last year, with 160 sales.

Land sellers “were waiting to see what’s happening with rates,” McSunas told the Business Journal. Meanwhile, “we were running out of product.”

At the end of 2023, new home projects in OC ranged in price from nearly $700,000 townhomes in Placentia to over $3 million estates in Irvine and Silverado Canyon, according to data from Irvine-based land brokerage Land Advisors Organization.

Bigger is Better

Standouts on the list include several builders with close ties to Orange County.

Miami-based Lennar Corp. (NYSE: LEN), whose West Coast base is in Irvine, ranks No. 1 on the list with 1,102 sales in 2023, up 103% from 2022. It’s the primary builder at the Great Park Neighborhoods, which was the best-selling master-planned community in OC last year (see story, page 16). Lennar counts a 40% ownership stake in Five Point Holdings LLC (NYSE: FPH), the Irvine project’s master developer.

Incline Village, Nev.-based Tri Pointe Homes Inc. (NYSE: TPH), which counts the bulk of its operations in Irvine, saw a 152% boost last year to 287 sales, placing it No. 3 on the list.

Tri Pointe is selling at the Great Park Neighborhoods, as well as Rancho Mission Viejo.
Landsea Homes Corp. (Nasdaq: LSEA), which moved its headquarters from Newport Beach to Dallas last year, but still has a local base, saw a 107% increase last year, to 174 sales, good for the No. 6 spot. The builder is currently selling townhome projects, including Hudson in Placentia and Avelina in San Juan Capistrano.

“The quality of our homes, prime locations of our communities and the overall value proposition of our homes [have] captured buyer attention, resulting in extremely high sales rates and success,” Landsea SoCal Division President Tom Baine told the Business Journal.


Melia’s 160 local home sales fall within the company’s annual goal of 150 to 200 homes a year, officials said.

“We’re not in major growth mode,” President McSunas said, adding that Melia’s yearly goal range is proportionate to the company’s headcount of 40 employees, which it aims to maintain.

“It’s very comfortable, yet it keeps us challenged and busy,” he said.

The company opened sales on its Cypress townhome community, dubbed Belmont, last year. The 129-home community, which McSunas called a “very successful project,” sold out this month.

Shea Homes, a longtime builder in the area, reported 103 home sales in OC last year, a decline of 57%, as it looked to other markets in Southern California.

“We increased deliveries in the Inland Empire and Ventura County while they decreased in OC,” Shea Chief Financial Officer Andy Parnes told the Business Journal.

Additionally, “we closed out most of our OC communities in 2022 and had a gap in sales before our new replacement communities opened in late 2023 and into 2024.”

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