Donna Strange doesn’t want to see more homes built in Manteca until foreclosures that are plaguing neighborhoods – including her own south of Woodward Park – are absorbed by the market.
That is why she spoke out last week against two proposed neighborhoods with a combined total of 863 single family homes that are envisioned for vacant land immediately south of the Jasmine Hollow, Emerald Glenn and Rose Garden neighborhoods near Woodward Park.
“What happens to the foreclosures in our neighborhood?” she asked the City Council if even more new homes are built nearby.
“Quite frankly I’m opposed (to the new homes),” Strange said but noted her position would likely change as the market changed.
Sixty percent of all new homes built in San Joaquin County in 2009 where in Manteca where 304 new single family homes were sold. That was almost three times more than the closest city which was Stockton.
At the same time, a record 1,211 existing homes sold in Manteca – primarily foreclosures and short sales. That followed 2008 when 1,165 existing homes closed escrow.
Manteca currently has 957 finished lots that are ready for homes to be built on them. There are 3,252 lots that are entitled. That means developers at any time they want could start site improvements and move toward building homes.
The two projects Strange was talking about – the 586-home Evans Estates and the 275-home Pillsbury Estates – are part of 5,429 single families “paper lots” which means they haven’t received final approval.
Annexation of Pillsbury Estates and Evans Estates – and approval of development agreements – will move them to the entitled categories. The City Council last week agreed to keep moving the projects forward.
Representatives of the developers noted that it is highly unlikely expensive infrastructure improvements that can run into the millions of dollars will take place in the next two years given the market.
Developers currently are trying to build homes on the 957 finished lots that are ready to go as “part of a cash management strategy.” They are losing money on every home they build so they can retrieve cash they’ve invested in the land, infrastructure, lot development, and planning process in order to stay economically viable. A typical lot reflects $121,079 that developers have stranded until they can get to the point they can build and sell a home.
Developers, who are trying to get the city to ease fees paid for growth-related city improvements that are tied to each building permit, have to spend an average of $48,464 in fees and then spend $150,000 to build a typical 2,000-suare-foot home based on data gathered by the city. By the time sales and marketing are factored into the equation, that typical home selling for $300,000 means the developer loses $1,079 in the developer’s example. But without building, they can’t retrieve the $121,079 they have in the ground. That is why they’d rather lose money on the sale of a home if they have no other choice.
The median selling price of a new home in Manteca in 2009 was just under $270,000. That compares to the median selling price of $178,000 for existing homes last year.
Consultant Jim Rachels noted that the planning process takes a number of years and that both projects were moving forward before the collapse in housing prices started.