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Saturday, Sep 23, 2023

UPSCALE–High-End Homes in Valencia? Newhall Takes Plunge

When people think about $700,000 homes, Valencia is seldom the first location that comes to mind. But Newhall Land Co. is aiming to change that. Once geared primarily toward the middle class, Valencia is going upscale as Newhall Land opens its second subdivision aimed at executives. Over the next few months, the developer will begin selling portions of its newest and most exclusive project, dubbed Bridgeport. Bridgeport is a gated community built on an island in the middle of a 15-acre lake, with homes selling for $700,000 and up. While million-dollar homes aren’t uncommon in Southern California, for Santa Clarita it marks a shift in target from the middle class. “In recent years, we’ve seen much more demand for high-end homes,” said Marlee Lauffer, spokeswoman for Newhall Land. “What we’re seeing is that now we have the infrastructure in place to support more of these homes.” Lauffer said Bridgeport is a natural extension as the area transitions from a suburb into a full-scale city. With the opening of upscale restaurants like the Salt Creek Grille and more services, the area is now able to lure in more-upscale homebuyers, she said. The move comes as Newhall Land has expanded Valencia’s employment base, beefing up its industrial park, Valencia Commerce Center, and enticing a number of large L.A. companies to move north most notably Princess Cruises. Until now, most new upscale housing projects in the greater San Fernando Valley area have been built in the Westlake Village/Thousand Oaks market and in Ventura County, said Lorry Lynn, principal with the Meyers Group, a real estate consulting firm. “(Valencia) is a logical outlet for people moving up,” Lynn said. “What we’re seeing is that Santa Clarita is not just a bedroom community anymore, but a market where executives want to live.” Homebuilders agree. Newhall Land’s success at attracting businesses to Santa Clarita helped convince Standard Pacific, one of Bridgeport’s five homebuilders, to develop the island homes, said Dale Casey, vice president of development and planning for Standard Pacific. (Newhall Land typically doesn’t build the homes on its new projects. Instead, it grades the land, puts in the infrastructure and then contracts with homebuilders.) “There’s a tremendous amount of job growth there,” Casey said. “Newhall Land has done so much in the commercial and industrial area.” Casey said he was also encouraged by the success of Woodlands, Newhall Land’s first upscale housing development, which opened in October 1998. The development’s success has made many rethink Santa Clarita as a viable upper-end housing market. Woodland’s Presidio homes, the most expensive group in the project, went on the market starting at $574,000, and sales were slow at first. But a few months in, buyers started to get interested, and prices have jumped 20 percent, meaning they start at around $695,000 and reach $939,000. The subdivision hasn’t sold out yet, but homebuilder Taylor/Woodrow is selling at an average rate of 0.7 home per week, according to the Meyers Group. Lynn said a sales rate of 0.5 a week is considered good for such high-end homes. “I think we were all surprised,” said Lynn. “That market has not seen a lot of product over $350,000.” Even Realtors in the area were surprised at the momentum of Woodlands. Mike Lebecke, a Realtor with RE/MAX, said he was unsure whether people would be willing to spend up to $1 million on a tract home in Valencia. Now, he’s convinced the area needs more homes like it. “In the (Santa Clarita) Valley there is a big pent-up demand from people wanting new product,” Lebecke said. “Most people moving to the Woodlands are people moving up who already live out here. These people can afford million-dollar homes. They’ve been in $300,000 to $400,000 homes for 10 years, and they’ve been stockpiling for a new home.” Newhall Land began filling the lake at Bridgeport this month, and the first model homes will begin opening in early April. The 300-acre development will feature 700 homes, a beach club, an extensive sidewalk system and a 12-acre park. Surrounding the lake will be more-affordable homes, with condos starting in the upper $100,000s and homes beginning in the upper $200,000 range. Unlike the Woodlands development, which has so far attracted mainly homebuyers who already live in Santa Clarita, developers and Realtors believe Bridgeport will lure people outside the immediate area because of its lake feature. One homebuilder, Centex Homes, has even started marketing the project on billboards in West L.A. “The lake will draw people from the San Fernando Valley as well as those already in the Santa Clarita Valley,” Standard Pacific’s Casey predicted. Bridgeport and Woodlands are only the start of upscale housing in Valencia. In coming years, Newhall Land is planning another high-end project called Westridge, a golf-course community south of Magic Mountain. Mitch Davis, president of the Southland Association of Realtors, said it’s unclear how much demand there is in Valencia for upscale housing. But he added that Newhall Land has been successful at determining what homebuyers have wanted in the past. “Newhall Land doesn’t make a lot of mistakes,” Davis said. But not everyone is so optimistic, especially because the area still has a significant commuter base. “They’re expecting additional demand, though I’m not sure how deep and wide that will be,” Lynn said. “It’s one thing to do one neighborhood. When you start doing three or four, it might be a bit much.”

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