Home values surge 40% in the last year in Palmdale, Lancaster, Quartz Hill, Rosamond and the surrounding communities in the Antelope Valley
Building costs also are on rise, however
This story appeared in the Antelope Valley Press on Monday, December 1, 2003.
By ANN WISHART
Valley Press Business Editor

Driven by historically low interest rates and the demand of an ever-expanding population for reasonably priced homes, the Antelope Valley real estate market is going nowhere but up.
The cycle - or cyclone - doesn't appear to have hit a resting place anywhere in California. Figures for the first 10 months of 2003 indicate an upward spiral.

The values of homes to be built in the next few months are up nearly 40% in the Valley from where they were a year ago, according to the Construction Industry Research Board, and the numbers of permits issued for those homes is up more than 32% from the first 10 months of 2002.

Permits issued show the values of homes to be built increased from $238.9 million to $333.5 million, and 1,799 permits had been pulled by the end of October 2003, compared to 1,357 by the end of October 2002. The market in the Valley already has outstripped all of 2002, when 1,588 residential permits were issued, according to Gretchen Gutierrez, executive director of the Antelope Valley Chapter of the Building Industry Association of Southern California.

Building costs are going up anywhere from 20% to 35% across the spectrum of communities in the Valley, according to CIRB figures. Last year, homes in some neighborhoods were selling for less than $100 per square foot. The median cost of a resale home in the Valley has risen to at least $100 per square foot and upward to $182 per square foot in Acton, according to DataQuick News.

Some of the costs are being driven by the market in Los Angeles and Ventura, where many existing homes are selling for around the southern California median of $333,000, up almost 20% from last October.

The housing market has been the one bright spot in the local, state and national economy for several years. Although retail sales seem to be coming out of the doldrums, the economy won't be out of the woods until businesses begin to hire workers again, according to some experts. But the low mortgage interest rates are keeping home sales hot.

"Real estate is the one constant thing in town," Gutierrez said. "It's the only thing in the economy moving forward."

As national construction firms such as Beazer, KBHome and Forecast play leapfrog across the region, land is being developed in large parcels and tracts of new homes seem to crawl across the desert.

"Most of the guys are buying pretty good-sized chunks (of land) right now," she said.

Meanwhile, they are using a number of Valley subcontractors and services. Local engineering firms and excavation companies are working very steadily.

"Four engineering companies (that are members) in the BIA have had to turn business away" because they don't have the time or personnel to meet the need, she said. The big builders use some of their own people and subcontract with Valley businesses about 50-50 for drywall, insulation, painting and flooring, she said.

Most of the roofing on tracts is done by crews brought in by the builders because local roofers are more likely to work on the custom homes, Gutierrez said.

Median prices of single family homes sold in October in Lancaster ranged from $150,000 to $213,000, depending on the ZIP code and in Palmdale median prices ranged from $172,000 to $293,000. The prices of the 735 existing homes sold in the two cities in October 2003 showed increases of between 19% and 30% over homes sold in October 2002.

According to the DataQuick annual chart, 3,167 existing Lancaster homes sold in 2002, an average of 264 a month, and 3,258 existing Palmdale homes sold in 2002, an average of 271 a month.

Homes in the Antelope Valley are selling at least as well as the rest of the Southern California region. A total of 32,522 homes were sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in October, according to DataQuick, down 0.9% from 32,813 for the month before but up 12.0% from 29,048 for October a year ago.

Last month's sales count was the strongest for any October DataQuick has in its records, which go back to 1988.

So far this year 299,932 Southland homes have been sold, up 5.4% from 284,498 for the same period last year.

"We thought the sales pace would ease back a bit after the August-September surge, but that hasn't happened. The market is strong in all categories, so there is no reason to think that trends will change between now and the end of the year. There is little doubt that 2003 will go down as a record year," DataQuick President Marshall Prentice said. The median price paid for a Southern California home was $333,000 in October. That was down 0.6% from September's $335,000, but up 19.8% from $278,000 for October last year, according to DataQuick Information Systems.

The typical monthly mortgage payment that Southland buyers committed themselves to was $1,519 in October, up from $1,516 for the previous month and up from $1,309 for October a year ago, DataQuick reported

Indicators of market distress are still largely absent. Foreclosure rates are low, flipping rates are low, down payment sizes are stable and there have been no significant shifts in market mix, DataQuick reported.
 

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