Builders set to build record number of condos North County Times - North San Diego and Southwest Riverside County News
Fred Pilot sent this along. It is from north San Diego County, known locally as "north county." I lived there for quite a while, including a few years in Leucadia (now part of the city of Encinitas) and then my wife and I lived for three years in Cardiff-by-the-Sea, also now part of Encinitas. Anyway, it's one of the fastest growing parts of California, and that is saying something. Check out the condo construction in north county. It is a vast expanse of land, and there is room for lots and lots of new construction. The questions are, how on earth are these people going to be able to drive to work, given the traffic congestion that is looming? And where will their kids go to school? Little details like that...
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With prices for new houses rocketing far out of reach for most first-time buyers in North County, local builders have abruptly shifted into the condominium market, setting off a construction boom that's poised to dwarf the condo craze of the mid-1980s.

After several years of focusing on high-end, detached houses, builders are finding strong demand and record sales for attached homes, which can be packed onto lots at 30 homes per acre.

The average price of a new condo reached $473,000 countywide in the second quarter, up 21 percent from the previous three months, according to a report Monday by MarketPointe Realty Advisors, a research firm based in San Diego. Along the Highway 78 corridor from Oceanside to Fallbrook, new condos sold for an average $395,000, up 18 percent from the first quarter.


What's more, sales are likely to set a record this year, with 4,904 attached homes sold in the first half. As recently as 2002, builders were selling fewer than 300 condos in a three-month period. The industry is considered certain to build 9,000 or more this year, easily surpassing peak production of 6,164 units set in 1985.

"We're really seeing an explosion in the attached housing market," said Russ Valone, president of MarketPointe. The firm calculates a weighted average of new-home prices to reduce the statistical effects of a few very expensive or low-priced homes sold each quarter.

Valone also had sobering news for buyers of new houses. The countywide average price for single-family, detached homes was a record $713,000 in the quarter ended June 30, up nearly 10 percent in a single quarter. The average size was 2,739 square feet.

In the north coastal region, which extends in the MarketPointe report from La Jolla through Carlsbad, the weighted average price for a new house was $975,000, up just 1 percent. In the Highway 78 corridor, the average was $662,000, up 13 percent from the first quarter.

Although prices shot higher, sales of new houses declined amid extremely tight supplies to 1,643 homes in the second quarter, or 37 percent of total home sales in the county.

Some builders say the prospect of rising mortgage rates prompted them a year or two ago to find ways to build more houses at lower costs to hedge against the possibility of crumbling demand for the high-end homes that have dominated the industry in recent years.

"I think that people are going to be buying less expensive housing and not more expensive housing if interest rates go up," said Greg Gallagher, vice president of land acquisition for Greystone Homes, the Carlsbad-based unit of industry giant Lennar Corp.



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There's more--read the whole thing.