— The Fresno Bee
Eager buyers and a recovering economy have renewed the interest of national home builders in the central San Joaquin Valley's new-home market.
After a three-year absence, McMillin Homes has returned to southeast Fresno where it is already building five houses and will start another four in its Stallion Springs development.
Centex Homes, D.R. Horton and Woodside Homes, which hung on in the Valley but pared back their development work during the housing bust, are now ramping up new Fresno and Clovis projects.
"We have seen the biggest annual gain in new home pricing in seven years in addition to a tightening of inventory available for sale with fewer foreclosures," said Carrie Williams, vice president for McMillin Homes.
With much of the buying activity from first-time and move-up buyers, McMillin would "like to help fulfill the need for quality new-home communities throughout the Central Valley," Williams said.
While consumer demand is helping to pull builders back, housing experts say the availability of nearly finished lots that can be developed quickly is another big draw for large out-of-town builders.
"Builders tend to go where the ready-to-build lots are located, even if those markets aren't the top performing markets," said John Mulville, vice president, consulting for Real Estate Economics, an Irvine firm.
During the recession, most builders shed their land holdings or sold land for tax benefits. National builders contracted to their corporate offices and centralized operations until the economy improved, said Mike Winn, president and chief executive officer of the California Building Industry Association.
Now, with housing in recovery, nearly all builders are short of buildable lots and are scrambling to find enough to meet their immediate business plans, both experts say.
"There is a real sense that many markets don't have the capacity to supply land as they have in the past," Mulville said.
Once ready-to-build lots are gone — those that are zoned for residential development and may be graded for construction — builders have to settle for land that could take years to get approvals.
"This brings big fish into smaller markets, recognizing that without land there is no home building," Mulville said.
At the end of 2006, there were more than two dozen local and national new-home developers in the Fresno area, according to Real Estate Economics. Some of the large out-of-town builders then included KB Homes, Beazer Homes, Woodside Homes and McMillin. Now, there are half the number of builders and only four national companies in Fresno.
KB, based in Los Angeles, is building in Madera, but has no Fresno development at this time. Beazer Homes of Atlanta pulled out of Fresno in 2008.
Woodside Homes has remained in Fresno through its 2008 Chapter 11 bankruptcy. It unveiled a new Clovis neighborhood at the end of last year and has plans for two new developments in Clovis and Fresno.
McMillin left Fresno in 2010 after completing its third neighborhood — and building more than 200 homes — in the Sunnyside Ranch development at Clovis and Sunnyside avenues.
The company had no other projects in Fresno at that time, Williams said.
But demand and the opportunity to buy some land on the corner of Clovis and Church avenues brought McMillin back.
The builder held a grand opening for its 34-home community last weekend. About 200 people visited the model home in those two days, Williams said.
Centex Homes finished building its 174-home Stonebrook community at Fancher Creek in southeast Fresno early this summer and just sold the last home in its Amber Point neighborhood, west of Highway 99.
In July, Centex opened an 84-home neighborhood on Kings Canyon Avenue in southeast Fresno called Tempo.
"We're seeing continued consumer demand in that area, so we went from one community to the next," said Julie Hagans, marketing manager for PulteGroup's Northern California division, which owns Centex.
Dallas-based D.R. Horton quietly sold out its 88-home Remington Place neighborhood in southeast Fresno this spring and is now planning to build two new communities.
"We are adding more communities this year partly because of growth in the retiree market," said Rich Ambrosini, Northern California division president.
The builder is celebrating the opening of Sequoia, a 74-home neighborhood in east-central Fresno. It plans to open Meadows, a 52-home community, in Clovis this fall.
Housing experts say there is no telling which new-home builder may enter the market next, but competition is high for land.
For now, Winn said, builders are "opening divisions or expanding divisions wherever there is a market opportunity."
The reporter can be reached at (559) 441-6495, blee@fresnobee.com or @bonhialee on Twitter.
After a three-year absence, McMillin Homes has returned to southeast Fresno where it is already building five houses and will start another four in its Stallion Springs development.
Centex Homes, D.R. Horton and Woodside Homes, which hung on in the Valley but pared back their development work during the housing bust, are now ramping up new Fresno and Clovis projects.
"We have seen the biggest annual gain in new home pricing in seven years in addition to a tightening of inventory available for sale with fewer foreclosures," said Carrie Williams, vice president for McMillin Homes.
With much of the buying activity from first-time and move-up buyers, McMillin would "like to help fulfill the need for quality new-home communities throughout the Central Valley," Williams said.
While consumer demand is helping to pull builders back, housing experts say the availability of nearly finished lots that can be developed quickly is another big draw for large out-of-town builders.
"Builders tend to go where the ready-to-build lots are located, even if those markets aren't the top performing markets," said John Mulville, vice president, consulting for Real Estate Economics, an Irvine firm.
During the recession, most builders shed their land holdings or sold land for tax benefits. National builders contracted to their corporate offices and centralized operations until the economy improved, said Mike Winn, president and chief executive officer of the California Building Industry Association.
Now, with housing in recovery, nearly all builders are short of buildable lots and are scrambling to find enough to meet their immediate business plans, both experts say.
"There is a real sense that many markets don't have the capacity to supply land as they have in the past," Mulville said.
Once ready-to-build lots are gone — those that are zoned for residential development and may be graded for construction — builders have to settle for land that could take years to get approvals.
"This brings big fish into smaller markets, recognizing that without land there is no home building," Mulville said.
At the end of 2006, there were more than two dozen local and national new-home developers in the Fresno area, according to Real Estate Economics. Some of the large out-of-town builders then included KB Homes, Beazer Homes, Woodside Homes and McMillin. Now, there are half the number of builders and only four national companies in Fresno.
KB, based in Los Angeles, is building in Madera, but has no Fresno development at this time. Beazer Homes of Atlanta pulled out of Fresno in 2008.
Woodside Homes has remained in Fresno through its 2008 Chapter 11 bankruptcy. It unveiled a new Clovis neighborhood at the end of last year and has plans for two new developments in Clovis and Fresno.
McMillin left Fresno in 2010 after completing its third neighborhood — and building more than 200 homes — in the Sunnyside Ranch development at Clovis and Sunnyside avenues.
The company had no other projects in Fresno at that time, Williams said.
But demand and the opportunity to buy some land on the corner of Clovis and Church avenues brought McMillin back.
The builder held a grand opening for its 34-home community last weekend. About 200 people visited the model home in those two days, Williams said.
Centex Homes finished building its 174-home Stonebrook community at Fancher Creek in southeast Fresno early this summer and just sold the last home in its Amber Point neighborhood, west of Highway 99.
In July, Centex opened an 84-home neighborhood on Kings Canyon Avenue in southeast Fresno called Tempo.
"We're seeing continued consumer demand in that area, so we went from one community to the next," said Julie Hagans, marketing manager for PulteGroup's Northern California division, which owns Centex.
Dallas-based D.R. Horton quietly sold out its 88-home Remington Place neighborhood in southeast Fresno this spring and is now planning to build two new communities.
"We are adding more communities this year partly because of growth in the retiree market," said Rich Ambrosini, Northern California division president.
The builder is celebrating the opening of Sequoia, a 74-home neighborhood in east-central Fresno. It plans to open Meadows, a 52-home community, in Clovis this fall.
Housing experts say there is no telling which new-home builder may enter the market next, but competition is high for land.
For now, Winn said, builders are "opening divisions or expanding divisions wherever there is a market opportunity."
The reporter can be reached at (559) 441-6495, blee@fresnobee.com or @bonhialee on Twitter.
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