By DANIEL TAUB
Even though much of L.A. County is developed out, leaving little room for new homes in areas like Westwood, Long Beach, Tarzana or Downey, new homes are being built in the county mostly on its edges.
According to Acxiom/DataQuick, a San Diego-based real estate research firm, 1,194 new homes were sold in L.A. County in the first quarter of 1998 up slightly from the 969 homes in the first quarter of last year.
For 1997, 5,413 new homes were sold, compared with 4,757 in 1996. Neither year, however, compares to 1991, before California’s recession, when 8,892 new homes were sold.
“A couple hundred years of building have diminished the land resources,” said Russ Valone, president of residential trends at Market Profiles of San Diego. “So it’s really the outlying areas of L.A. where most of the development activity is going to go on.”
The site of most of the new residential development is the Santa Clarita Valley particularly Valencia. In 1997, Valencia was the fastest-selling community in Los Angeles County for new homes, according to Marlee Lauffer, spokeswoman for Newhall Land and Farming Co., Valencia’s developer and one of L.A. County’s largest residential real estate developers.
Last year, 657 new homes sold in Valencia, an increase of nearly 20 percent from 1996, Lauffer said.
In the first quarter of this year, 170 new homes sold a 10-year, first-quarter high for the community, and a 13 percent increase from new-home sales in the first quarter of 1997. “We continue to see very strong activity in residential,” Lauffer said.
Many of the homes being built in the Santa Clarita Valley are selling for between $240,000 and $350,000. They tend to be about 2,200 square feet and built on lots from 5,000 square feet to 7,000 square feet.
The average home there, Valone said, has two stories, four bedrooms, three bathrooms, a living room, a dining room, a family room and a two- to three-car garage.
In the Antelope Valley northeast of the Santa Clarita Valley, a larger number of “starter” homes are being built. New homes there can be found for as low as $130,000, Valone said, and they may be as small as 1,400 square feet.
Kaufman and Broad Home Corp., the largest homebuilder in the Antelope Valley, said it expects to build 300 homes there this year, and continues to buy parcels of land in Lancaster and Palmdale.
“The only place that can be big in gross total activity for new homes is Santa Clarita and just up the 14 freeway to Lancaster and Palmdale,” said Robert Scanlan, executive vice president of the Greater Los Angeles division of Kaufman and Broad. “That’s just the only place you’ll get unit velocity at all.”
Another active area is the San Gabriel Valley, where roughly 200 of the 1,200 new homes sold in L.A. County in the first quarter were located, according to Market Profiles.
That market, however, is not expected to keep pace with the Santa Clarita Valley because not as much space is available there.
“Although the San Gabriel Valley is going to lose some market share because it doesn’t have as much inventory, that’s not going to happen in the next year or two,” Valone said.
Real estate analysts say that because people are willing to commute into L.A. from far-flung localities like Riverside and San Bernardino counties, homes built in L.A. County tend to be larger and more luxurious.
“Some of the other counties have more of the starter homes,” said Alan E. Horwitz, an audit partner at E & Y; Kenneth Leventhal Real Estate Group. “Indeed, the few homes being built in the more-developed regions of L.A. County such as the San Fernando Valley are at the higher end of the price scale.”
In the next several months, RWR Homes Inc. expects to finish building the last 15 homes in an 89-home tract in Granada Hills. Those units, which sell for about $500,000 apiece, are about 4,000 square feet on lots of 25,000 square feet with some on lots as large as 60,000 square feet.
“There’s not too much land left up there, really,” said Dave Crail, vice president of construction for Van Nuys-based RWR Homes. “I think we’ve got one of the last bigger parcels left in that area.”
After that is completed, Crail said, his company will move to other projects outside of L.A. County.
Aside from finding large tracts of empty land, Crail said another challenge for homebuilders is finding construction workers. Many workers left the area during California’s recession, he said.
“They all moved to Las Vegas and Phoenix,” he said. “And Phoenix has slowed down, but Vegas hasn’t.”
Crail said the last year, and, in particular, the last few months, have been good to his company. The company’s sales for the first quarter of 1998 are triple what they were in the first quarter of 1997, he said, with few already-built homes available for sale.
“The market has improved tremendously, and the availability of homes has shrunk,” he said. “Our sales are on fire right now.”