Looking for signs of a thaw in the new housing market that has gone into a deep freeze as the median price of a Manteca home plunged 57 percent in four years?
There’s the carpenter concerto – hammering and power sawing – that is piercing the morning fog in such Manteca neighborhoods as Tesoro, Deer Park, and Union Ranch with 42 new homes starting in January.
That, however, is building taking place on some of Manteca’s 957 finished ready-to-build lots that represents an investment in infrastructure and land that was made four or more years ago.
So what about developers ready to make the big plunge that would require putting millions up front? That would be a sure sign the new housing market freeze is starting to melt.
One such sign can be found at the biggest – and arguably the most financially secure – housing project in the Northern San Joaquin Valley known as River Islands at Lathrop.
Three builders are already making serious inquiries with Cambay Group regarding developing part of the some 2,500 lots at River Islands that – with the investment of internal infrastructure – are just six months away from being ready to build.
Project Manager Susan Dell’Osso noted it has been a significant time since any inquiries had been made from builders let alone the type that the three current prospects represent what are “higher quality” developers. The three inquiries were made within the past month.
River Islands – a master planned community of 11,800 homes – is the ultimate vote of faith in the Northern San Joaquin Valley housing market.
Cambay Group based in Great Britain is treating it as a long-term investment just as they did the similar-sized Dougherty Valley in Contra Costa County that took over 17 years to develop. The firm has sunk in excess of $150 million so far into the project for everything ranging from the creation of 300-foot wide levees, interior lakes, and sewer capacity to secure water for the entire development and even going as far as to secure lower electricity than PG&E through the Lathrop Irrigation District.
“Having secured water is probably even more critical in California than flood protection,” Dell’Osso said in reference to the never ending battle in California over water.
Right now the most positive sign for Dell’Osso are builders looking for new neighborhoods to build.
“There isn’t a lot of land (with entitlements ready to develop) out there,” Dell’Osso said. “Many let their investments go for 10 cents on the dollar and those lots have been built on already.”
Manteca has 3,252 entitled lots in addition to the 957 finished lots.
Given the close proximity of River Islands to Manteca – it is within four miles via the Highway 120 Bypass – it will have a major impact on home development in Manteca once the first home is built. That could happen as soon as early 2011.
The Cambay strategy has always been not to flood the market which in turn would reduce the value of their lots yet to be built on. Instead, they plan a measured response to market demand.
Altogether there are 4,300 lots so far protected by the levees now in place of which 2,500 lots are just six months away at any given time from having homes built.