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Housing slump impacts builders
By Philip Franchine - Sahuarita Sun
Sahuarita has weathered the nationwide housing slump better than some locations, but the number of building permits issued by the town fell by 67 percent in 2007 from 2006, so tougher times may be ahead.
In fact, while Quail Creek saw closings on the sale of almost 100 homes last year within a special taxing district, or CFD, Robson Communities had projected sales of about 150 in that area.
The shortfall means the developer will be paying an extra $1 million toward financing of road and parks costs that would have been borne by new homeowners, a Robson official said in a rare admission by a developer of the impacts of the housing slowdown.
Rancho Sahuarita recently reported a 17 percent increase in home sales in 2007 over 2006, up to 573 from 490. However, the number of building permits issued there dropped to 156 in 2007 from 556 in 2006 and 818 in 2005, so future sales would hinge on builders completing hundreds of homes on lots with old permits.
Rancho Sahuarita officials have projected home sales of about 500 a year over the next decade.
Throughout the town, permits issued in 2007 dropped to 389, down sharply from 1,233 in 2006 and 1,635 in 2005, according to figures compiled by Town Building Official Andy Kelley.
In Quail Creek, permits dropped from 335 in 2005 to 273 in 2006 to 21 in 2007. Madera Highlands first received permits in 2006, with a total of 154, and was issued 127 in 2007.
Other developers or builders with a high number of permits issued include: Monterey at Los Arroyos, with 139 in 2005; Meritage at Los Arroyos with 100 in 2006 and 34 in 2007; KB Home at Santa Thomas Villas, with 200 in 2005, 74 in 2006, and 20 in 2007; Pepper Viner in La Joya Verde with 44 in 2005, 24 in 2006 and 7 in 2007, and La Canada with 21 in 2007.
In the first three months of 2008, Rancho Sahuarita (84) and Madera Highlands (48) have started strongly, followed by Meritage at Los Arroyos (17); Quail Creek (5) and KB Home at Santo Tomas Villas (4).
Robson chief economist Steve Soriano said the company had projected closings of about 150 for the CFD portion of Quail Creek in 2007, but the actual number was 99. The developer and town together have created a Community Facilities District or CFD that has financed the park in Quail Creek, a new section of Campbell Road and other public improvements, using the town’s ability to sell tax-exempt municipal bonds to offer the developer less-expensive financing. The bonds are repaid by property taxes collected from homeowners who moved into Quail Creek after the CFD was created, and the developer is responsible for any shortfall.
With slower-than-anticipated home closings, Soriano said, “Over $1 million in [CFD] costs has been shifted to Robson Communities. A lot of the benefits of the CFD are essentially wiped out because of the downturn in the market.”
And Robson’s advertising now says buyers can “save big” at Quail Creek and SaddleBrooke “at the lowest prices since 2005 — from the $220,000s at Quail Creek and the $240,000s at SaddleBrooke--for a savings of up to $80,000.”
When sales were red-hot several years ago, prices at Quail Creek and other developments shot up by tens of thousands of dollars a home seemingly overnight. Quail Creek buyers have a year to close on their homes, so the sales figures peaked in 2004 at 450 sales, while closings peaked at 279 in 2006. By comparison, closings in 2004 were 215 and sales in 2006 were 156. In 2007, for all of Quail Creek (not just the CFD), sales were 76 but closings were 254 (with 99 closings in the CFD). In any case, no tears need be shed for Robson, Soriano said.
“We’re still paying the bills and the (CFD) interest, keeping things going, maybe making a little money. Quail Creek is actually enjoying pretty good sales compared to others, but not as robust as we projected. We don’t feel it nearly as badly as conventional home builders, but our customers need to sell their houses back home before they can buy here,” Soriano said.
In fact, Soriano said Quail Creek has sold 23 homes, with 13 closings, already this year.
Responding to complaints made by Town Council member John Sullivan at the April 9 Town Council meeting about the size of Quail Creek Park, which is financed by the CFD, Soriano said that Robson already had increased the amount of land and money involved at the town’s request. Soriano said the inclusion of a playground, which was not requested by Quail Creek residents, was “a compromise” made at the town’s insistence.
Sullivan and others noted that CFD budget of $1.3 million for the park did not allow for any badly needed ball fields. However, Soriano said Robson’s land donation for the park is large enough to accommodate four future ball fields, and said the town can add those as it can afford to do so.
“Robson Quail Creek has contributed the land and the first $1.3 million toward this public park. We, in cooperation with the Town, also provided adequate land for future park needs, such as the ball field. The decision as to what to build in balance of the park is up to the Town.
“In addition to the $1.3 million for the park, the Quail Creek CFD will also build approximately $10 million more in public improvements. You can see some of the completed parts if you drive down Campbell Road, linking the communities south of Quail Creek to the railroad crossing at Quail Crossing Boulevard,” Soriano said.
pfranchine@sahuaritasun.com | 547-9738
In fact, while Quail Creek saw closings on the sale of almost 100 homes last year within a special taxing district, or CFD, Robson Communities had projected sales of about 150 in that area.
The shortfall means the developer will be paying an extra $1 million toward financing of road and parks costs that would have been borne by new homeowners, a Robson official said in a rare admission by a developer of the impacts of the housing slowdown.
Rancho Sahuarita recently reported a 17 percent increase in home sales in 2007 over 2006, up to 573 from 490. However, the number of building permits issued there dropped to 156 in 2007 from 556 in 2006 and 818 in 2005, so future sales would hinge on builders completing hundreds of homes on lots with old permits.
Rancho Sahuarita officials have projected home sales of about 500 a year over the next decade.
Throughout the town, permits issued in 2007 dropped to 389, down sharply from 1,233 in 2006 and 1,635 in 2005, according to figures compiled by Town Building Official Andy Kelley.
The area that did strongest in all three years was Rancho Sahuarita.
In Quail Creek, permits dropped from 335 in 2005 to 273 in 2006 to 21 in 2007. Madera Highlands first received permits in 2006, with a total of 154, and was issued 127 in 2007.
Other developers or builders with a high number of permits issued include: Monterey at Los Arroyos, with 139 in 2005; Meritage at Los Arroyos with 100 in 2006 and 34 in 2007; KB Home at Santa Thomas Villas, with 200 in 2005, 74 in 2006, and 20 in 2007; Pepper Viner in La Joya Verde with 44 in 2005, 24 in 2006 and 7 in 2007, and La Canada with 21 in 2007.
In the first three months of 2008, Rancho Sahuarita (84) and Madera Highlands (48) have started strongly, followed by Meritage at Los Arroyos (17); Quail Creek (5) and KB Home at Santo Tomas Villas (4).
Robson chief economist Steve Soriano said the company had projected closings of about 150 for the CFD portion of Quail Creek in 2007, but the actual number was 99. The developer and town together have created a Community Facilities District or CFD that has financed the park in Quail Creek, a new section of Campbell Road and other public improvements, using the town’s ability to sell tax-exempt municipal bonds to offer the developer less-expensive financing. The bonds are repaid by property taxes collected from homeowners who moved into Quail Creek after the CFD was created, and the developer is responsible for any shortfall.
With slower-than-anticipated home closings, Soriano said, “Over $1 million in [CFD] costs has been shifted to Robson Communities. A lot of the benefits of the CFD are essentially wiped out because of the downturn in the market.”
And Robson’s advertising now says buyers can “save big” at Quail Creek and SaddleBrooke “at the lowest prices since 2005 — from the $220,000s at Quail Creek and the $240,000s at SaddleBrooke--for a savings of up to $80,000.”
When sales were red-hot several years ago, prices at Quail Creek and other developments shot up by tens of thousands of dollars a home seemingly overnight. Quail Creek buyers have a year to close on their homes, so the sales figures peaked in 2004 at 450 sales, while closings peaked at 279 in 2006. By comparison, closings in 2004 were 215 and sales in 2006 were 156. In 2007, for all of Quail Creek (not just the CFD), sales were 76 but closings were 254 (with 99 closings in the CFD). In any case, no tears need be shed for Robson, Soriano said.
“We’re still paying the bills and the (CFD) interest, keeping things going, maybe making a little money. Quail Creek is actually enjoying pretty good sales compared to others, but not as robust as we projected. We don’t feel it nearly as badly as conventional home builders, but our customers need to sell their houses back home before they can buy here,” Soriano said.
In fact, Soriano said Quail Creek has sold 23 homes, with 13 closings, already this year.
Responding to complaints made by Town Council member John Sullivan at the April 9 Town Council meeting about the size of Quail Creek Park, which is financed by the CFD, Soriano said that Robson already had increased the amount of land and money involved at the town’s request. Soriano said the inclusion of a playground, which was not requested by Quail Creek residents, was “a compromise” made at the town’s insistence.
Sullivan and others noted that CFD budget of $1.3 million for the park did not allow for any badly needed ball fields. However, Soriano said Robson’s land donation for the park is large enough to accommodate four future ball fields, and said the town can add those as it can afford to do so.
“Robson Quail Creek has contributed the land and the first $1.3 million toward this public park. We, in cooperation with the Town, also provided adequate land for future park needs, such as the ball field. The decision as to what to build in balance of the park is up to the Town.
“In addition to the $1.3 million for the park, the Quail Creek CFD will also build approximately $10 million more in public improvements. You can see some of the completed parts if you drive down Campbell Road, linking the communities south of Quail Creek to the railroad crossing at Quail Crossing Boulevard,” Soriano said.
pfranchine@sahuaritasun.com | 547-9738
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