The SoCal slowdown
Even billionaires want a bargain, and in December, investor and Dallas Mavericks owner Mark Cuban scored one — relatively speaking — in Laguna Beach. He closed on a house there for $19 million after it originally came on the market in January 2018 for almost $26 million. The 7,867-square-foot home is on the grounds of The Montage resort, and it was among the highest priced home sales in Orange County for 2018.
And over in Newport Coast, a $30.5 million sale was logged for a 15,000-square-foot home in Crystal Cave. Alan Brynjolfsson, founder of lighting manufacturer Volt Lighting, scored the property at a discount from the $35 million list price in a deal that closed at the end of the year.
Standout sales aside, the most recent data reveals a decline in residential home sales in Orange County compared with a year ago. In November 2018, home sales were down nearly 12 percent from the same month in 2017, according to figures from CoreLogic. The median sales price for the county inched up nearly 3 percent from that time, to $719,000.
Meanwhile, brand-new inventory is hitting the market. At the end of the year, Landsea Homes — a subsidiary of Landsea Green Group, which builds master-planned communities across the U.S., Germany and China — announced the first sales at Copperleaf at IronRidge, located in the South Orange County city of Lake Forest. The 107 three-story, energy-efficient townhomes are priced starting in the mid-$500,000s.
On the commercial front, Sunflower Plaza, a 27,000-square-foot shopping center, sold to former NBA player Josh Childress in a $9.54 million deal. Kidder Mathews facilitated the sale for Sunflower Plaza Company, which had built the Santa Ana property and owned it for 40 years.
By the end of 2018, the Inland Empire housing market was giving off “mixed signals,” with a small uptick in new listings, a decrease in sales and a plateauing in median sales price, according to Mark Dowling, chief executive officer of the Inland Valleys Association of Realtors [IVAR].
When compared to November 2017, sales are down nearly 12 percent, according to IVAR’s most recent report. And while the median sales price was up nearly 7 percent from the same time last year, in the last six months of 2018, it remained flat at $390,000. Inland Empire cities with the top-priced homes include Diamond Bar, with a median of $680,000, and La Verne, with a median of $635,000.
There was more growth in the multifamily rental category, with Inland Empire rents growing 5.4 percent from the previous year, compared with 4.2 percent for Los Angeles, according to a report from research firm Yardi Matrix.
The last quarter of 2018 saw some significant activity on the commercial front. Ground broke on phase one of Colony Commerce Center, a $450 million logistics center in Ontario slated for completion in 2019. The 3 million-square-foot complex is a joint venture between Ivanhoé Cambridge and CapRock Partners.
In October, the Tarski Group acquired Heritage Plaza, a 119,000-square-foot shopping center in Riverside in a deal valued at $26.3 million. And in December, Center Tower Riverside, a 73,645-square-foot office building, sold for $20.5 million to De Anza Land & Leisure Corp. That made for a tidy profit on the five-story building, which last sold in 2015 for $13.8 million.
The numbers don’t lie when it comes to San Diego’s housing market: A slump is in full swing. In November, sales were down 19 percent from the previous year, according to housing statistics compiled through the San Diego MLS by the Greater San Diego Association of Realtors. The association’s president, Steve Fraioli, wrote in the report that although the end of year was a sluggish time for house sales (as it typically is), there was another troubling trend: “It does appear that the pace of home price growth has slowed.” The median price in November hit $565,000, up a little over 6 percent from the November 2017 median. But overall housing inventory is up a whopping 36 percent from last year, with 7,234 homes on the market in November 2018.
The end of 2018 also saw some landmark commercial deals. BLT Enterprises, a Santa Monica-based property development firm, acquired a 221,660-square-foot industrial spread in Vista, in North San Diego County, for $31.1 million. The property was sold by DENSO Wireless Systems America, which was the original developer and currently occupies the building. The facility is the only one larger than 200,000 square feet in the area and it’s within walking distance of shops, restaurants and residential neighborhoods.
In hospitality news, Orlando, Florida-based Xenia Hotels & Resorts Inc. spent $170 million on the 327-room Park Hyatt Aviara Resort Golf Club & Spa. The 222-acre hotel includes several tennis courts, an 18-hole golf course designed by Arnold Palmer and a 15,000-square-foot spa. The property will continue to be managed by Hyatt.
The Woolsey Fire, which tore through Ventura and Los Angeles counties in early November 2018, has compounded an already tight housing market in Ventura.
“We’ve been losing population, especially young people, in Ventura County primarily because of the high cost of housing and the fire will exacerbate the situation,” Los Angeles-based economist and retired CSU Channel Islands professor Sung Won Sohn told the Ventura County Star. The fires burned 97,000 acres and destroyed more than 1,600 structures, causing $3.5 to $5.5 billion in damage to residential properties, according to CoreLogic. Damage to commercial properties could reach an estimated cost of $500 million, the firm found.
Among new residential developments coming online in the region is The Junction at Wagon Wheel in Oxnard, a 219-unit development with starting prices ranging from $1,850 for a one-bedroom unit to $3,380 for a three-bedroom.