Coronavirus Rebound: Irvine’s Great Park Home Sales Back to ‘Normal Velocity’
Tuesday, June 09, 2020
Homebuying at Irvine’s high-profile Great Park Neighborhoods has rebounded to “normal velocity,” says the project’s chief executive, Emile Haddad, CEO of FivePoint Holdings. In mid-March, Coronavirus had forced “stay-at-home” orders that throttled the economy and pushed home sales at the Irvine project to zero.
The company’s project on the long-shuttered airbase had 553 sales last year — that’s almost 11 a week — ranking it among the nation’s Top 20 best-selling master-planned communities.
And in 2020’s first 11 weeks, builders on FivePoint land had made sales contracts at a nearly 14-a-week pace. A strong economy, cheap mortgages — and the debut of the Great Park’s sixth housing community, Rise Park — got house-hunters in the mood to buy.
Then came pandemic concerns and the lockdown. Sales went to zero in mid-March. At that time, Haddad said he saw an economy put into an “induced coma” for its well-being: “Once the patient awakes, they should be healthy.”
And that wasn’t the sales bottom. The following week, “net” sales (newly signed contracts minus buyer cancelations) were minus four. Then minus three. Then four homes sold, then back to zero. That’s five weeks adding up to a net loss of three sales.
Then, almost as suddenly as sales slowed, buying rebounded as “reopening” slowly began. In the last six weeks, 45 sales contracts were signed — including 10 three weeks ago and eight each in the last two weeks.
“It feels like now we’re back normal velocity,” Haddad said.
Now the CEO isn’t ready to say the real estate market is fully back to normal. He needs even more strong weeks of sales to lower his concerns. The year-to-date sales pace, thanks to the virus, is still off 18% from 2019, a year that saw Great Park sales down 15% from 2018.
“It is early in the post-COVID-19 period to feel like there is any solid trend line in terms of homes sales,” Haddad said. “It’s a good start, but if there is a second or third wave of the virus this could change again.”
Great Park’s homebuilders are confident despite a steep, statewide drop in newly filed residential building permits.
A shortage of existing homes for sale, created largely by owners taking homes off the market, is an added plus for homebuilders.
“We have not seen anybody stop or slow down,” Haddad said of builders.
And at Five Point’s 21,000-home Valencia project, which won’t begin sales until 2021, the building continues, too. “The feedback I get is that they feel very comfortable,” Haddad said.
Category: COVID-19, Economic Development