By Jonathan Lansner
Opening a new home project in the middle of a pandemic is perhaps a bit of bad timing.
Remember March? Before we had new tools and rules on how to lower personal contact points for home sales during a pandemic.
New Home Co. debuted its Sterling community in Rancho Mission Viejo in March with no fanfare in the middle of great economic uncertainty. Two months later, the first phase is “sold out,” the company says, with 14 homes under contract.
It’s a modest sales burst, and contracts are not closed deals. But it provides the builder some confidence to start construction plans for many of the remaining 46 lots.
“It’s better than what we would have anticipated,” says New Home CEO Leonard Miller.
The battle against the pandemic’s spread has throttled the economy. It cost California more than one-fifth of its jobs. That kind of business disruption has meant at least 1-in-14 borrowers nationwide have some sought sort of mortgage forbearance.
Sterling’s single-family detached homes are part of a longer-term strategy by many homebuilders to move away from larger “McMansion” style houses popular just a few years ago. Wealthier buyers seeking multigenerational living have become a far smaller part of new-home shopping.
The Sterling homes are on narrow lots, roughly 4,000 square feet in total, in a conventional setup with a traditional driveway and two-car garage. The two-story residences hold up to five bedrooms and four bathrooms in as much as 2,595 square feet of living space.
Prices start “from the mid-$800,000s” and hit a curious sweet spot in south Orange County for move-up house hunters seeking anything under $1 million.
Miller knows that in this shaky economy some builders are making deals to move houses, whether it be quietly trimming prices or more officially hawking concessions, like help with closing costs or discounted upgrades. But not at Sterling. Miller expects pricing to rise.
Virus fears forced New Home to cancel Sterling’s March 21 “grand opening” festivities. The company quickly retooled its sales processes under “stay at home” government edicts to protect the health of house hunters and sales staff alike.
Virtual tours and robust online marketing have become the norm for first looks in all home selling. New Home, at first, arranged private showings without the aid of a sales office. It now offers onsite help with proper social distancing.
Miller admits March was a scary time with little buyer interest in any real estate. April brought some house hunters back out. “Since Easter, every week’s gotten a little bit better,” he says. “We are encouraged.”
Perhaps it was the turnabout in crashing stock prices, he suggests.
Now Sterling is a noteworthy sales success in what’s otherwise a dreary period. But New Home officials do admit to a few quirks that give Sterling an edge.
It’s the last neighborhood to be built in the Esencia slice of Rancho Mission Viejo — a popular master-planned community that won’t have any other new homes until early 2022. And most of those Sterling buyers are currently residents elsewhere in Rancho Mission Viejo.
Read more by the OC Register here.