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Housing development in North County bounces along bottom

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New home construction in San Diego is predominantly taking place in North County.

Of the 2,678 units remaining for development in the county’s active housing projects, 66 percent, or 1,771, are in North County, according to data provided by MarketPointe Realty Advisors.

Seventy of the 127 active projects — those with unsold houses, units remaining for development or that sold units in the second quarter —are located in North County.

There were 557 new homes sold in the county during the year’s second quarter, 56 percent of which, or 312, were sold in North County. Many of the remaining homes sold in the quarter were attached properties in San Diego proper.

Robert Martinez, director of research at MarketPointe, said the current best measure for gauging the activity within a particular project is homes sold during the most recent quarter.

“Some builders aren’t starting construction until something is sold,” he said. “The average builder just doesn’t have as much standing inventory without a committed buyer.”

Two large-scale developments in Carlsbad, La Costa Oaks and La Costa Greens, are moving product efficiently.

Fifty-nine units sold in those two developments in the most recent quarter. There are 205 properties remaining for development in those two developments, 162 of which are in La Costa Oaks.

Activity is similarly brisk — relative to current market conditions — in the Black Mountain Ranch Community in the Del Sur master plan.

In the nine active developments in Del Sur, 52 housing units were sold last quarter. Another 47 units remain unsold, and 239 remain for development.

The Sentinals II development there, by Davidson Communities, sold six properties last quarter, has six additional properties of unsold inventory, and 56 units remaining for development.

Mike Levesque, chief operating officer of Davidson, said the Del Sur master plan has been well received by prospective buyers, but demand remains restrained.

“Most people are concerned with what’s going on in the world,” he said. “What we see everyday is people have an interest in buying, but it’s hard to get people off the fence.”

By one widely relied-upon indicator, demand for new, detached properties this year is relatively flat from last year. Through the first six months of the year, developers have pulled permits in the county for 1,334 single-family homes. During the same period a year ago, 1,385 single-family permits had been pulled.

While units marked as remaining for development by MarketPointe’s numbers have yet to have their permits pulled, Martinez said those existing in actively selling developments have a much better chance of eventually coming to the market than those that are merely in the planning stages.

“Carlsbad’s La Costa Greens and La Costa Oaks, Del Sur, the Foothills, these are the projects that are moving,” he said.

The Foothills, also in Carlsbad, includes three active developments: Alcea is a D.R. Horton development with 62 units planned for development that didn’t sell any homes last quarter. William Lyon Homes sold five units in the second quarter, leaving one unsold unit in its 32 total-unit project, with none remaining for development. Brookfield Homes sold nine units in its Rockrose at The Foothills development, leaving 56 units still to be consummated.

Rancho Santa Fe’s The Crosby has three active developments. Fifteen units sold in the last quarter between them, and have another sixteen remaining for development.

Levesque said Davidson also has plans for 43 units in The Crosby. The project is scheduled to begin in October, with models open after the first of the year. It’s the company’s last remaining undeveloped parcel.

“Right now, we’re a supply-constrained market,” he said. “There aren’t a lot of inventory or maps sitting there waiting to be developed, and we expect that we’ll continue to be a supply constrained market.”

Martinez said even the current prevalence of single-family developments, diminished as it is compared to the recent peak, will soon be a thing of the past.

“Buildable land is dwindling in San Diego County,” he said. “At some point we’ll have a propensity of higher densities.”

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