More than $3.5 billion was spent on new homes in Orange County last year as the area’s busiest builders reported the most sales here in a decade.
The county’s 30 largest homebuilders sold 4,032 new single-family homes, condominiums and townhomes here in 2014, a 13% increase from a year earlier, according to this week’s Business Journal list.
It’s the highest sales total seen in Orange County for new homes since 2004, when sales totaled 4,700 (see chart, page 28).
Single-family home sales, which totaled 2,681, were up by 10% from 2013 and increased for the fourth straight year.
Condo and townhouse sales posted a 20% year-over-year increase, the second year-over-year increase in a row for the segment. Those sales totaled 1,351 last year.
Total new-home sales in Orange County have increased every year since 2009, when the local market bottomed out with fewer than 1,500 sales.
Data for the list was provided by the Costa Mesa office of Washington, D.C.-based real estate research firm Hanley Wood LLC, augmented by information from individual builders and Business Journal research.
The latest growth in local sales counters trends seen across the country, where the housing market has been “stuck in neutral,” according to Scott Stowell, chief executive of Standard Pacific Corp. in Irvine, the largest builder based in Orange County.
Nationwide
New-home sales in the U.S. totaled about 435,000 in 2014, up from 429,000 a year earlier, according to government figures.
Sales remain far below a peak rate of nearly 1.4 million in 2005.
“We have always maintained that the housing market recovery would unlikely be an uneven one,” Stowell told analysts during his company’s latest earnings call earlier this month.
“When looking longer term, we continue to maintain a cautious but positive outlook. The fundamentals for housing still look good. Interest rates remain near historic lows, (and) job growth continues to impress,” Stowell said.
The near-term goal, Stowell said, is to find entitled and “developed land in the ‘A’ locations we target,” with OC being one of the builder’s core markets.
• Standard Pacific took the No. 3 spot on the list with 382 local sales, a 3% year-over-year increase. The company has large projects under way in Brea and also is one of several builders involved in the first phase of development at Rancho Mission Viejo, one of four large masterplanned residential developments now selling in OC (see story, page 17).
Each of the top 10 builders on the list had at least one project selling at those four communities—Rancho Mission Viejo, Great Park Neighborhoods, Baker Ranch, and Irvine Ranch. Five of the top 10 builders here last year reported sales in two or more of the masterplanned developments.
About 35% of all new-home sales in OC last year took place on the Irvine Ranch, the area’s largest source of new homes. About 53% of sales at Irvine Ranch in 2014 were made to Asian-American buyers and other buyers from Asia, according to data from Irvine-based John Burns Real Estate Consulting.
Shea Homes
• Walnut-based Shea Homes was the only builder to have projects selling in all four large masterplanned communities last year. It grabbed the No. 2 spot on the list as a result, with 405 sales last year, a 52% year-over-year increase.
Irvine Pacific
• Irvine Pacific, the in-house building arm of Newport Beach-based Irvine Company, retained the No. 1 position with 680 sales last year, a nearly 40% decrease from 2013 levels.
Irvine Pacific actually eased off its earlier pace and was one of only six builders on the list to post year-over-year decreases in sales.
The dip came with local land prices on the upswing, which led Irvine Co. to shift homebuilding operations on land it owns on the Irvine Ranch from its in-house operations to third-party builders last year.
Seven builders in the top 10 sold homes on the Irvine Ranch last year.
A few other builders, including Aliso Viejo-based New Home Co. (No. 21 with 42 sales), build homes for Irvine Pacific under fee-building arrangements. Those sales are reported under Irvine Pacific’s total on the list.
• Rounding out the top six was Scottsdale, Ariz.-based Taylor Morrison Inc., which posted 305 sales last year, a 66% increase; William Lyon Homes Inc. in Newport Beach, whose sales in OC jumped 143% last year to 285; and Miami-based Lennar Corp., which had 264 sales here last year, a 27% increase.
Lennar is expecting a profitable 2015 in OC, thanks to the next phase of development at Great Park Neighborhoods, where the company was an initial investor and retains a stake in the project, according to Chief Executive Stuart Miller.
FivePoint
• Aliso Viejo-based FivePoint Communities, the master developer of Great Park Neighborhoods in Irvine, last month announced the second phase of homebuilding at the project, a 916-home community called Beacon Park.
Nine builders, including Lennar, are part of Beacon Park. Lennar has been tapped to build 253 of the homes, Miller recently told analysts.
Lennar—as part of its investment in Great Park Neighborhoods—also is expecting to see $30 million in income as a result of the other eight builders’ purchases of land at Beacon Park, Miller said.
• The highest-ranking builder without any homes going up on the four largest masterplanned communities was Mission Viejo-based Woodbridge Pacific Group Inc., which took the No. 11 spot with 96 sales, including at the Brightwater development in Huntington Beach.
Seal Beach-based Olson Co., one of the region’s largest infill developers, was No. 12 with 95 sales. It currently is selling in Placentia and Fullerton and has a project in the works for Huntington Beach.
