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Orange County builders’ inventory at 12-year high: 1,022 unsold new homes

by in News

  • New homes by Seville at Park Place community in Ontario on Monday, May 7, 2018. (Photo by Watchara Phomicinda, Inland Valley Daily Bulletin/SCNG)

  • Homes start selling in the $800,000s at Prado at Cadence Park in Irvine’s Great Park Neighborhoods. (Sketch courtesy: KB Home)

  • Sound
    The gallery will resume inseconds

  • Zephyr, developers of South Cove in Dana Point, is starting work on Phase 4, which will bring 10 luxury condos to market. The condos are designed in two designs: single-story Aliso flats and the multilevel Trestles townhomes. (Courtesy of Zephyr)

  • New Home Co. is building 28 new homes in Ladera Ranch. (Sketch courtesy of New Home Co.)

  • New Home Co. is bring 40 luxury homes to Orange in the Marywood Hills project. (Courtesy: New Home Co.)

  • Valencia homes by Van Daele are priced from the low $500,000s.

  • Front of one of 15 homes offered by Brandywine Homes at its Newbury community in Yorba Linda. (Courtesy: Brandywine Homes)

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Orange County homebuilders are trying to sell their largest supply of completed new homes in 12 years.

According to Metrostudy, local builders had 1,022 newly constructed residential units ready for immediate sale in the second quarter, up 340 or 50 percent in a year. That’s the highest level since the end of 2006. For those who get antsy about overbuilding, builder inventories averaged 458 in the previous boom years of 2004-2007.

This growing supply comes as Orange County builders may have cooled their construction pace. Metrostudy found 2,780 residential units under construction, off from the recent peak of 3,087 in last year’s third quarter — the fastest development pace since 2006. Note: Construction averaged 3,012 units in 2004-2007.

One change in how builders work is constructing smaller communities. That increases the number of model homes to sell: 386 in use in the second quarter, up 12 in a year. Models averaged 274 in 2004-2007.

And builders have amped up their inventories of ready-to-build lots. The 6,208 available in the second quarter was down 841 (12 percent) in a year but lots counts averaged 2,385 in 2004-2007.

Builders aren’t the only home sellers facing rising inventories. ReportsOnHousing says there were 7,001 existing homes and condos listed for sale as of Aug. 23, the largest supply of resale housing on the market since September 2016.

CoreLogic reports builders are successfully juggling the greater supply, so far. In the 22 business days ended July 11, 429 new homes were sold — up 16 percent in a year. Sales of existing homes fell by 6 percent.

Let’s not forget the homebuilder’s high-end target audience: New home median sales price of  $896,500 vs. $735,000 for the overall market.

How many Californians can ‘afford’ their home?