San Diego Union-Tribune


Otay Ranch usually makes the John Burns Real Estate Consulting list every year


Otay Ranch continued to dominate new home sales in San Diego County in 2020, said an annual report from John Burns Real Estate Consulting.

There were 760 home sales in the Chula Vista developmen­t last year, making it the No. 17 top selling master-planned community in the nation in John Burns’ annual top 50 list. Based on data through November, nearly a third of all newly built homes sold in San Diego County were in

Otay Ranch.

The 25,000-acre developmen­t, nearly the size of San Francisco, actually had 50 fewer sales in 2020 compared to the previous year when it ranked No. 8 on the list.

Scott Wild, vice president of John Burns, said the drop in sales had more to do with developers struggling to build enough homes — nothing to do with demand. He said several builders laid off staff at the start of the COVID-19 pandemic anticipati­ng a

recession, not predicting the intense rise in home prices and demand for houses from workers stuck doing jobs from home.

“A lot of people were kind of unprepared,” Wild said.

California housing industry organizati­ons were quickly able to convince Gov. Gavin Newsom at the start of the pandemic they were an essential service. The thinking was that people are required, or at least asked, to stay home to not spread the virus — so the last thing you want to do is stop homebuildi­ng.

Wild said all masterplan communitie­s struggled with ramping up constructi­on as demand skyrockete­d. He said California builders had a disadvanta­ge in that pulling permits in the Golden State is traditiona­lly slower than in other parts of the nation. Yet many developers, from Texas to Florida, faced similar issues. One of the biggest reasons cited were labor shortages.

Melissa Hazlett, vice president of sales at Baldwin & Sons, said it was able to ramp up but other things got delayed — such as getting loans prequalifi­ed rapidly. Baldwin & Sons, one of several builders in Otay Ranch, had one of its biggest sales years in recent memory with 411 sales. That compares to 203 in 2019 and 162 in 2018.

She said sales were almost instant as soon as homes were released because many buyers were on waiting lists. Hazlett said it was typical in the past for a phase of 12 homes to sell three or four in the first day. Following the start of the pandemic, she said 90 percent of homes were selling instantly.

“People were willing to buy knowing they would wait eight months for a home,” she said. “It wasn’t

about us building homes fast enough, it was about how fast can we release them.”

Wild said Otay Ranch sells well because it has a diversity of different home types for different price points. Another factor, he said, was that when homes are more affordable in California, it is like a lightning rod for potential buyers who are eager to own. In some cases, newly built homes in Otay Ranch are cheaper than older single-family homes in much of San Diego.

“When homes are available, they are selling very fast,” Wild said of the Chula Vista developmen­t.

Some of the cheapest homes in Otay Ranch are townhouses. In the Suwerte developmen­t, near the Otay Ranch Town Center mall, the least expensive townhouses start around $373,000. The three- to fourstory townhouses range from 1,192 to 2,429 square feet. The most expensive are single-family homes, such as the roughly $950,000 to $1 million houses in the Billa Sitia developmen­t. Homes range from 3,654 to 4,256 square feet.

There are tradeoffs with living in Otay Ranch. Many homes are close to the Otay Landfill, which can smell occasional­ly in the winter months. Also, most of Otay Ranch falls under a MelloRoos tax district, where a special tax is levied in addition to property tax to pay for infrastruc­ture, so taxes can be more expensive than other parts of the county.

The top-selling masterplan community in the nation last year was the retirement community The Villages in Florida with 2,452 sales, nearly the same as the previous year when it also was No. 1 on the John Burns list. It made national news several times during the presidenti­al election in 2020 for dueling golf cart caravans in support of President Donald Trump or, now President-elect, Joe Biden.

Some other top-selling masterplan communitie­s in California were Ontario Ranch in Riverside and San Bernardino (No. 5) with 1,292 sales; Irvine Ranch in Orange County (No.14) with 800 sales; River Islands in Stockton (No. 24) with 640 sales; and The Great Park Neighborho­ods in Orange

County with 580 sales.

Otay Ranch has made the list several times over the years. It was No. 10 in 2018 (660 sales) and No. 14 in 2017 (563 sales). The developmen­t was hit hard during the Great Recession and was off for several years, but it was No. 41 in 2014 (254 sales), off the list in 2013, No. 9 in 2012 (528 sales) and No. 21 in 2011 (441 sales). Predating the Top 50 list, John Burns data shows the topselling year was 2004 with 1,777 sales.

There were still around 16,900 housing units left to be built in Otay Ranch at the start of 2020, according to Chula Vista residentia­l growth forecasts. However, a final projection for how much will be built is difficult as new projects have been proposed for the area — such as converting land zoned for industrial into housing — and developers could switch from singlefami­ly to multifamil­y in some cases and raise the final number.

 ?? NELVIN C. CEPEDA U-T ?? There were 760 home sales at Otay Ranch in 2020, said John Burns Real Estate Consulting.
NELVIN C. CEPEDA U-T There were 760 home sales at Otay Ranch in 2020, said John Burns Real Estate Consulting.

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