Irvine Ranch top master-planned community in the state, again
Master-planned communities have been gaining ground — and luring buyers — for decades in California, from Rancho Bernardo in northern San Diego County to North Natomas in Sacramento.
But the Irvine Company has long been the poster-child for master-planned community success since opening University Park in 1966, the first neighborhood in Irvine. The neighborhoods of Turtle Rock and Northwood soon followed, and Irvine became a city in 1971 — and a model for other master-planned communities.
Fast-forward five decades and The Irvine Company continues as the largest master-planned developer in California, and the seventh-largest in the U.S., according to John Burns Real Estate Consulting. (The Irvine Company has been the national leader in previous years, most recently in 2017.)
Irvine Ranch, a collection of homes in Orange County (think Irvine, Newport Beach and Tustin) sold an estimated 850 homes in 2019, just ahead of second-place Otay Ranch in San Diego.
California had five of the top 20 master-planned communities in the nation, and eight among the top 50, according to John Burns Real Estate Consulting. Those eight master-planned communities had a combined 5,021 homes sold in 2019, or about 16% of homes sold in master-planned neighborhoods in the U.S.
California’s best-selling master-planned communities in 2019:
- Irvine Ranch in Orange County: 850 homes
- Otay Ranch in San Diego: 836 homes
- Ontario Ranch in Riverside-San Bernardino counties: 810 homes
- Westshore in Sacramento: 725 homes
- The Great Park Neighborhoods in Irvine: 553 homes
- Rancho Mission Viejo in Orange County: 445 homes
- River Islands in Lathrop: 410 homes
- Mountain House east of Livermore: 392 homes
Feature photo of Irvine Ranch’s Quail Park by Guo/Shutterstock.
Three cities join million-dollar club, three others drop off
California is a tale of two markets, at least when it comes to million-dollar home prices.
Three communities in California — Redondo Beach, Santa Ynez and Sierra Madre — had an average home value top $1 million in 2019, joining the list of better-known markets such as Bel-Air and Corte Madera.
But three communities in the state, including the city of San Jose, fell off the $1 million-plus list, according to Zillow. San Quentin and Lexington Hills (Santa Clara County) homes also dipped below $1 million.
It’s the first time since 2016 that a city dropped from the elite $1 million mark (Laie, Hawaii, also joined the three California communities off the million-dollar list). The cities falling off the $1 million list coupled with the fewest communities added clearly indicate a slowing housing market nationwide.
An average of 20 cities cracked the $1 million list annually from 2014-18, including a record 25 cities in 2017.
The U.S. has 218 million-dollar cities, with more than half coming from three metro regions — San Francisco, New York City and Los Angeles. Five metro regions in California are among the top 10 million-dollar communities, with San Francisco leading the way with 46.
Zillow estimates eight communities in California, based on their latest price growth, will crack the million-dollar club in 2020 — Alameda, Avila Beach, Carmel Valley, Clayton, Dana Point, East Pasadena, Glen Elle and View Park-Windsor Hills.
But three cities in the state — Daly City, Fremont and Milpitas — will drop below $1 million this year, at least based on the current value trends.
Cover photo of Santa Ynez vineyard by David M. Schrader/Shutterstock.
million-dollar cOMMUNITIES by metro region:
Rent or buy? For many in California, the answer is easy
It’s one of the most often-asked questions among Californians these days — buy or rent?
Sure, bigger paychecks, near-record-low mortgage rates and slower home-price growth are making homes more affordable, but unless prices slide much of the state is out-of-reach for the average Californian, according to an ATTOM Data Solutions report.
Cut to the chase, it’s better to rent than buy.
Well, unless you live in Kings County (Hanford-Lemoore) or Madera in the Central Valley, where buying makes sense. The cities home prices are $230,000 and $264,000, respectively, less than half the state’s median home price, according to the California Association of Realtors.
Sure, rent costs a pretty penny (and a lot of dollars) in Los Angeles and San Francisco, taking more than 40% of the monthly paycheck (see the last item in this blog regarding rent in the state), but that’s still much less than owning a home — and the mortgage payment.
Of course, the ATTOM affordability buy-or-rent report does not include some of the other financial benefits of homeownership, including the mortgage deduction, the pride of ownership and the security of knowing your monthly mortgage payment.
But, more cash in the pocket — or even better, in the bank or brokerage account — likely beats the other homeownership benefits.
Buy or rent? Data from ATTOM Data Solutions
Some of the priciest apartments, largest rent increases in California
One of the biggest challenges in saving enough money for a down payment to buy a home is the high price of rent in the state. It’s hard to pinch pennies when it takes almost every one of them to keep a roof — albeit a rented one — over your head.
And the Golden State has some of the most expensive rental markets in the nation and the price keeps rising, according to two recent reports.
California has four of the 10 priciest rental markets in the nation, with second-place Orange County requiring almost two of every three dollars (64.7%) earned to pay rent. San Diego and Contra Costa counties were in third- and fourth- place in the U.S., taking almost 60% of the paycheck. Los Angeles was ninth on the national list at 53%.
While the state’s metro regions grab headlines with hard-to-believe (and pay) rents, some of the midsize communities are enduring the largest rent increases in the U.S., according to a RealPage report.
Bakersfield had the third-largest percentage rent increase in the nation during the past year at 7.5%, behind only Phoenix (8.1%) and Huntsville, Ala. (7.9%). Fresno’s average apartment rent was up 5.9%, followed by Santa Barbara County at 5.5%.
Sacramento’s average rent increased 4.7% during the past year, while Riverside-San Bernardino counties (also known as the Inland Empire) were up a more modest 4.2%.
Apartments, just like homes, are greatly affected by the limited supply and the impossible-to-meet demand for housing, which has caused rents to soar during the past few years in California.
However, an aggressive effort by the state, prompted by Gov. Gavin Newsom’s housing mandates, coupled with a strong economy has helped pave the way for more projects. For example, Los Angeles has an estimated 17,600 apartments to be completed in 2020, significantly more than the 7,600 in 2019, according to RealPages.
“Developers have struggled to produce enough new housing to meet demand in recent years,” said Greg Willett, chief economist at RealPages. “However, the volume of apartments on the way in 2020 certainly could test the market’s ability to absorb a big block of additional units in a short time frame.”
Perhaps, but the addition of more apartments would likely be a short-term problem in California, which has a severe shortage of housing units.
Cover photo of San Francisco apartments by Berti123/Shutterstock.
Longtime business journalist-turned-communications executive who enjoys reporting on residential real estate in his spare time.