News Summary
Orange County’s homebuilding market is experiencing a severe downturn, with total sales dropping by 23% in the past year. The decline is particularly evident in single-family homes, where sales fell by 31%. Major builders like Tri Pointe Homes and Taylor Morrison have seen staggering decreases in sales. Despite these challenges, some companies like California Pacific Homes have managed to thrive. The scarcity of available land for new construction is largely to blame, and experts remain cautiously optimistic about a potential recovery in 2025.
Orange County Homebuilders Hit Hard by Sales Decline
Orange County, known for its beautiful weather and vibrant communities, is facing a significant downturn in the homebuilding market. In the past year, the top developers have sold a total of 2,253 homes, which marks a whopping 23% decline from the previous year’s 2,912 homes. This drop can be felt across the board, affecting both attached and detached homes.
Single-Family Homes Take a Major Hit
When it comes to single-family homes, the situation is even more challenging. Sales for these types of properties plummeted by 31%, bringing the total to just 908 homes. Meanwhile, the sales of attached homes, such as townhomes and condominiums, didn’t escape the downturn either, with a 15% reduction in sales.
Top Builders Struggle
A closer look at the builders reveals that out of the top 13 in the area, nine reported fewer homes sold compared to the previous year. Tri Pointe Homes struggled the most, with a staggering 67% decline in sales, only managing to sell 95 homes. Taylor Morrison’s figures were equally disappointing, with just 25 detached homes sold, reflecting a 59% drop from 2023; they didn’t sell a single attached home this time around. Trumark Homes also took a hit, with sales down by 52%.
KB Home registered a 44% decrease, with only 53 homes sold. Even Lennar, traditionally one of the heavyweights in the market, saw its sales volume drop by 15% to 936 homes, down from 1,099 in 2023.
Toll Brothers and Their Sales Woes
Toll Brothers reported tough times ahead as well, selling 94 attached homes which is a 37% decrease and witnessing a 49% plummet in detached home sales, only getting 172 sold. What’s going on? It all points to a significant issue in the land supply. A scarcity of available land for new construction in Orange County is key to understanding this sales slump.
An Industry in Transition
Industry experts note that there’s a marked lack of mapped, entitled, and finished lots for builders to work with. One bright spot in the current dismal situation is that some companies are finding a way to flourish. For instance, California Pacific Homes enjoyed a remarkable 200% increase in homes sold, totaling 135. The Olson Company also fared well with 92 attached homes sold, representing an impressive 104% growth. Mission Viejo-based PulteGroup managed to maintain stable sales amidst the downturn.
What Lies Ahead for Homebuilders?
The ongoing decline in home sales reflects broader challenges in the housing market within Orange County. While conditions are tough now, some industry leaders are cautiously optimistic about a potential recovery in 2025, mainly fueled by motivated buyers and an ever-reducing existing inventory.
It’s also worth noting that Irvine Pacific, which was once a big player in homebuilding as the development arm of the Irvine Company, has now exited construction altogether and will not be seen in this year’s sales reports. The overwhelming data is compiled from various local builders and highlighted by a prominent real estate research firm.
Only time will tell how the market evolves, but for now, Orange County homebuilders have their work cut out for them!
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HERE Resources
Additional Resources
- Orange County Business Journal
- Wikipedia: Real Estate in Orange County
- Orange County Register
- Norada Real Estate Investments
- News Observer
