Despite a broad market slowdown, demand for affordably priced single-family homes remains strong. The sharp rise in mortgage rates have pushed first time single-family home buyers to more tertiary locations where price points are much more attainable. First time buyers are more payment sensitive than other buyer segments, and more expensive borrowing costs have further priced single-family buyers out of coastal markets.
In Southern California locations like Hemet, Menifee, Perris and Moreno Valley, many builders are currently having success selling single-family homes at price points starting under $600K. In many coastal locations, it is difficult to find new SFD homes at prices under $1M. Even attached resales are often hard to come by at comparable prices.
Below is a partial list of the most successful single-family detached new home communities in Southern California over the last three months. While the profiled communities have lowered prices, builders have found the price points that sell. These communities are averaging 5.0 - 7.7 sales/month - far outpacing the overall Inland Empire market which has averaged 1.6 - 2.1 sales/project/month during the same time period.
Most Successful New Home Communities in Southern California
Over the last three months
Young families are the primary buyers at these communities. Buyers are coming from locations throughout Southern California, including coastal cities, and are looking for affordably priced move-in ready, single-family detached homes.
The work-from-home trend, which has accelerated since COVID, has helped drive buyers to these locations. As the large 20 and 30-something demographic forms families at an accelerating rate, demand for sub-$600K single-family homes will remain strong and secondary/tertiary markets will benefit.
Clarity Real Estate Advisors has evaluated the market viability of thousands of real estate developments and provides market-based guidance to builders, land developers, and investors. We help our clients make the most well-informed decisions possible by providing the most accurate and timely market information possible, evaluated through the lens of decades of market experience. Please contact us to talk about your next deal.