Biggest Project

Winner

The Fairways, Centex Homes

Runners Up

Cheyenne, Epac Communities

Riverside Rhapsody, Innovations/Palmdale

Highest Sales

Presley at Carey Ranch, Presley Cos.

Kaufman & Broad at Carey Ranch, Kaufman & Broad Home Corp.

Most large-scale housing projects are built at the edges of L.A. County, but the largest new development to hit the market last year, as well as the hottest-selling one, is right in the middle of the area’s industrial heartland.

Centex Homes’ Fairways development in Pico Rivera, which hit the market last June, sold 132 units in 1998. At this point, 162 of the 194 homes planned have been sold.

“It was amazing. Homes were sold before the models were even build,” says Darlene Peysar, business assistance manager with the City of Pico Rivera.

In fact, 72 of the Fairways’ homes were sold in the second quarter of 1998, before the project’s first homes had even been completed. (As of last week, construction had been completed on 120 homes.)

The Fairways, at the intersection of Beverly Boulevard and the San Garbriel River Parkway, is an “infill” project, one being built on a previously developed site in an already mature market. Such projects often are more difficult to develop than a planned community in outlying regions largely because they involve placating existing property owners, both business and residential.

For all their challenges, infill projects have become a lucrative niche for residential developers, according to Bob Bray of the Meyers Group, a real estate information firm. “They have been starved for new housing in many of these areas, and if a builder introduces an innovative concept, there are great opportunities there,” Bray said.

Roland Osgood, division president of Centex Homes, says one of the advantages that infill projects offer is that the competition to attract buyers is less intense. While prospective homebuyers in outlying areas like Santa Clarita and the Antelope Valley have their pick of several different new housing projects, prospective buyers in infill areas typically have far fewer choices.

Meanwhile, there is enormous demand for new homes by people who have been longtime residents of the communities surrounding the Fairways, Osgood said.

“Our buyers come from nearby places, such as Downey and Whittier, and Pico Rivera itself,” he said. “They’ve lived here most of their lives, they work in the area, and their children go to school here.”

Most of those buying homes at the Fairways are Latino and Asian, according to Osgood. Because of the area’s demographics, Centex had to make sure its homes were affordable. “We are not going to build $400,000 homes at the Fairways because there is no market for those,” said Osgood.

Homes at the Fairways range in price from $190,000 to $256,000, and range in size from 1,500 to 2,600 square feet. The lots range from 4,000 to 5,000 square feet.

“It is the price of the land that determines the price of the homes,” said Osgood. “We build our houses for between $40 and $50 per square foot, no matter where we build them. The only differences between a house at the Fairways and one in one of our planned communities is that they may have different appliances or an eight-foot ceiling instead of a nine-foot one.”

The scarcity of available land in L.A. County means that an increasing number of developers are starting to pursue infill projects. “Builders are looking for opportunities and this is an innovative way to get around the scarcity of land,” said Bray of the Meyers Group. “There are some hurdles involved in working with city councils and ordinances, but the margins make it worthwhile.”

Since Osgood started Centex’s South Coast Division in 1997, the company has developed a number of infill projects in Long Beach, Garden Grove, and Orange. “Anytime something becomes available, we’ll be interested to do another infill project,” said Osgood.

Edvard Pettersson