The waiting game is turning into the betting game for developers of new housing projects in the Manteca-Lathrop area.
Six years after new housing construction slowed down to a trickle with the mortgage meltdown, ground is starting to break on new housing endeavors.
The sleeping giant - the 11,000-home River Islands at Lathrop - is betting the housing market is picking up enough strength that they have started working on infrastructure to prepare the first 200 lots to make them available for building by next spring.
The second generation Raymus Homes - part of the family that at one time had built two out of every five homes in Manteca - is gearing up to break ground next fall on infrastructure of the first phase of the 538-home Oleander Estates in south Manteca.
Bill Filios - a principal in ANF with decades of experience in home and apartment building across the country - isn’t ready to move forward yet. He’s convinced that the market has yet to rebound to the point of reducing risk to a reasonable level for major infrastructure investments needed to create new building lots.
Manteca in June issued 52 permits for new single family homes - the highest monthly amount since 2005. Another 23 homes were started in July to bring the total for the first seven months of 2012 to 167. That puts Manteca on pace for the fourth consecutive year of 300 plus housing units being started. Since the housing bubble burst, Manteca has led the Northern San Joaquin Valley in housing starts. One year, more homes were built in Manteca than in the rest of San Joaquin and Stanislaus counties combined.
Mountain House, Oakwood Shores sales prompt move
Cambray Group of England has more than 20 years and well in excess of $200 million invested in River Islands at Lathrop in the form of land, a new bridge crossing, a new school, super levees, storm drainage, water capacity buy in, and other improvements.
Project manager Susan Dell’Osso noted Danville - where Cambray Group developed the 11,000-home Dougherty Valley - is seeing 2004 prices being paid for homes. That year is significant as it was the last time prices were considered reasonable before the market started overheating.
Dell’Osso said strong sales in Mountain House west of Tracy and Oakwood Shores just southwest of Manteca also helped prompt the decision to go forward.
There were three subdivisions of buildable lots being offered in Mountain House several months ago. Fourteen builders jockeyed to purchase them. All the projects went for the full asking price.
The builders at River Islands will be plugged into requirements aimed at making the development as green as possible when it comes to energy and water use. All front yard landscaping must have moisture detectors to minimize the use of water. Also, every 20 homes will be grouped with a solar power source in a bid to reduce reliance on the state’s power grid.
The solar aspect will be controlled by Lathrop Irrigation District. Even without the solar generating, the district’s electrical operations set up in consultation with the South San Joaquin Irrigation District, will sell power at 25 percent below PG&E’s costs.
Dell’Osso said how solar panels will be placed is still being explored. Besides on roof tops, they may be part of parking structures, around the perimeters of parks or even be incorporated into something as innovative as picnic shelters at parks.
Storm water run-off will also be green. All storm water will run into interior manmade lakes that have marshlands on the edges with the bottom lined with gravel with lake bottoms having sandy loam. That will allow storm run-off to percolate through the soil.
Raymus gearing up in Manteca
Toni Raymus said Raymus Homes is looking toward breaking ground on the first phase of Oleander Estates this fall, encouraged by stabilized housing prices and a somewhat strengthening demand.
“It’s not normal but it’s a lot better market than last year,” Raymus said.
The firm has just sold eight of the 49-homes it is offering at their Liberty neighborhood in Oakdale. They also are in the process of building their final home in the 190-lot Linden neighborhood they started in 2006. They have also sold the final home in the small Ken Hill Estates custom neighborhood off of Woodward Avenue west of Main Street.
Initially, Raymus plans on developing 100 lots on the west side of Oleander Avenue at Woodward Avenue.
Still waiting before making a big plunge
Bill Filios agrees that the housing market is improving but demand is still too soft to pencil out the high upfront cost needed to create more buildable lots from his own perspective and that of his partners.
Before a home can be built, lots have to be created. That means spending millions upfront for infrastructure such as sewer and water lines, storm drainage, streets, power and natural gas lines, and other improvements. Since that has to be financed, the longer it takes to build, the longer it takes to get money back.
Filios noted Union Ranch in north Manteca where Atherton Homes is building is enjoying fairly steady sales.
Manteca four years ago had an inventory of 960 buildable lots representing in excess of $60,000 per lot of money that developers had in the ground. Builders have been slowly pulling that money back out but many have had to do so at huge hits on their bottom lines.