The Inland Empire’s homebuilding surge has made what was once seen as distant Southern California living — land along the route to Palm Springs — a hot property.
Most of an unfinished project in Calimesa with 3,052 approved home sites has been bought in what’s being called the region’s second-biggest sale of lots in eight years.
The undeveloped parcels in the 2,590-acre Summerwind Trails master-planned community have been sold by the original developer, Irvine-based SunCal, according to broker Land Advisors Organization of Irvine. Buyers are Pasadena builder Paul Onufer’s JPMB Investments backed by real estate financier JEN Partners. Financial terms were not released.
The land’s story is a grand lesson in local real estate’s ebbs and flows. In 2011, SunCal paid $71 million for Summerwind and two other unfinished projects acquired from the bankruptcy estate of Wall Street’s Lehman Bros. The brokerage’s 2008 collapse helped spark a global financial meltdown that led to the Great Recession. SunCal had been a financing partner of Lehman before the bankruptcy.
And it’s not like Summerwind immediately took off. It wasn’t until early 2018 that SunCal sold its first lots. Today, 600 homes are being built and sold by Lennar, Meritage Homes, Richmond American, and D.R. Horton in the project’s first phase. Summerwind’s new owners expect to begin grading in early 2022 and have finished lots to sell by the end of the year.
This sale comes as builders’ thirst for buildable land in the Inland Empire has focused on sites off the I-10 between Calimesa and Beaumont.
Homebuyers are clamoring for options amid a limited supply of existing homes. Inland Empire listings are down 55% in the year ended in November, the biggest drop in the nation.
Just ponder the fallout of so little to buy.
Sales at the Ontario Ranch new-home project grew 71% last year to 1,292 to rank it No. 5 among all U.S. master-planned communities, according to John Burns Real Estate Consulting. Audie Murphy Ranch in Menifee saw sales jump 124% to 479, ranking it No. 43.
And pending sales of new homes in the Inland Empire in November ran 64% above a year ago, according to Zonda.
That boom came as November saw 1,014 single-family permits filed in Riverside and San Bernardino counties, up 29% from a year earlier and 18% above the five-year average.
Still, Zonda says there’s a shortage of lots in the Inland Empire. Supply fell 22% last year. Only four U.S. markets — Nashville, San Diego, Portland and Seattle — had bigger drops.
The I-10 corridor where Summerwind is located has become hot real estate as house hunters in the pandemic era seek larger and more affordable living quarters. The region became even more attractive as widespread remote work arrangements became more acceptable.
Mac O’Donnell of Land Advisors says he’s witnessed a remarkable change in the last year. In early 2020, the land sales were modest with urban in-fill projects — typically dense, multifamily developments in old city neighborhoods — selling on par with suburban, single-family developments. The pandemic changed everything.
“The market has gone very strong to master-planned communities. There’s a rush to tertiary markets,” he says. “In-fill is mostly on the back burner.”
And why the boom off the I-10? “Cheap land,” O’Donnell says.
Builders might pay up to $170,000 for finished lots in the area, he says. Compare that with as much as $450,000 around Santa Clarita and $500,000-plus in Orange County.
Source: Orange County Register