Home / Archive / San Joaquin: Supply Meets Demand Change
Thursday, May 17, 2012
Regional Focus: February 2006
Supply Meets Demand Change
Rapid population growth is being accompanied by big developments and rising home prices.
Story by Jeff Hudson
There are new homes in San Joaquin County — thousands of them. And some of the largest planned communities the area has ever seen are on the way.
Mountain House, currently under way where Interstate 205 crosses western San Joaquin County, is the big one. When complete, Mountain House will be a new 15,600-home “town.” Sanctuary, a large development in Stockton by The Grupe Co., is working its way through the planning process. Other elements in the picture include a 1,400-home Del Webb active-adult community in Manteca, and many smaller developments.
Along with local developers like Grupe, many national homebuilders that, by and large, have been active in the Bay Area or Sacramento, have recently set up offices in San Joaquin County.
All this is happening as San Joaquin County experiences rapid population growth and a rise in home prices. In 2000, San Joaquin County had 566,600 residents. The current estimate, by the San Francisco Bay Area-Central Valley Inter-Regional Partnership, shows 633,348 residents for 2005, growing to 900,338 by 2025.
Why do so many people commute to San Joaquin? Jobs in the Bay Area pay more, while houses in San Joaquin County cost less. The median family income for Santa Clara County was an estimated $93,900 per year, and the median income for Alameda County was $81,200. Compare that to the $55,300 median family income in San Joaquin. The median home price in Santa Clara was $625,000 for the third quarter of 2005, and $561,000 for Alameda, versus $421,000 for San Joaquin.
In general, San Joaquin County home prices moderate as you head further east on Interstates 205 and 580, representing a longer Bay Area commute. Manteca had a November median home price of $460,000 based on 113 sales. Stockton — the traditional population center of the county — had a median of $388,000 based on 553 sales.
It may come as a surprise to Sacramento residents that San Joaquin County home prices are higher than home prices in the Sacramento region, which has a $413,000 median, and that the median price in Tracy ($595,000) is higher than the median price in Davis ($560,000).
The emerging new community of Mountain House, located west/northwest of Tracy but outside Tracy city limits, is being populated by homebuyers with Bay Area jobs. But Eric Teed-Bose, director of community development with Trimark Communities LLC, which prepared the master plan for Mountain House, sees changing trends in the years ahead.
“The big picture is to create a balanced community,” one that will ultimately include “around 22,000 jobs,” according to Teed-Bose. “The model we are following is that we have to create the nucleus of the community. In the early years it will be predominantly residential. But we anticipate that after we get a critical mass of population ... a door is going to start opening for employers.
“My guess is that probably 60 to 65 percent of Mountain House buyers are Bay Area refugees,” says Teed-Bose. “But it’s not one segment. There are some families that were already out in Pleasanton or Livermore, had realized some equity, and are moving to a bigger home a little further out. But there are also families coming from San Jose, Oakland or even San Francisco who have a job in the East Bay and are moving to Mountain House because it gets them a bigger home and better cash flow. We’ve also got empty nesters and older families with kids in high school.
“Another 30 to 40 percent of our buyers are moving in from places other than the Bay Area, including Stockton, Lathrop and Manteca,” says Teed-Bose. “If these buyers from within the county are Bay Area commuters, moving to Mountain House can cut 20 minutes or so off their daily drive.”
Trimark Communities began developing the master plan for Mountain House in the late 1980s. Back then, plans included acreage in Alameda and San Joaquin counties. But as the project progressed, Mountain House shifted entirely over into San Joaquin County, hugging the county line.
Mountain House is laid out as a series of 12 villages, each centered on a park-school combination, with the schools serving grades K through eight. There will ultimately be a high school. It will be another 20 years or more before the project is built out.
Plans call for a mix of home sizes and price ranges, from apartments, two-bedroom townhomes priced in the $300,000s, and small- and midsize detached homes on up to “some big homes and big lots, priced in the low $800s, but not estates,” according to Teed-Bose.
While Trimark carried the project through the lengthy planning process, the actual homebuilding is being done by national companies like Centex, Pulte and Lennar. Shea Homes will soon enter the picture with an active-adult community designed to compete with Del Webb.
“The active-adult market has really changed” and is no longer aimed solely at retirees, says Teed-Bose. “A lot of people in that market are still working but don’t have kids in the house anymore.”
Other builders involved with Mountain House include Sacramento’s Gerry Kamilos, who expects to build around 400 homes, and the East Bay’s Pegasus Development, which is actively marketing space in the 140-acre Mountain House Business Park, approved in November by the San Joaquin County Board of Supervisors.
Pegasus is also building a 65,000-square-foot office building and a 105,000-square-foot one-story building featuring flexible office space.
“We also have signed letters of intent from a fast-food operator and a major drugstore chain,” adds Pegasus Vice President for Marketing and Leasing Paul Radich. The business park has space reserved for motels, but those are several years out.
Trimark is also planning office space, according to Teed-Bose. “We have 80 acres that we’re developing, and the first building will be 28,000 square feet of Class A office space. We’re in design for a medical office building, which should be open in late 2006.”
On the horizon is a branch campus of Delta College, envisioned on a 110-acre Mountain House site. “The college is going to create a great synergy, not only in social-fabric evolution, but in terms of business evolution,” Teed-Bose says.
The first Mountain House models opened in late 2003. About 1,200 homes are occupied, representing less than 10 percent of the 15,600 homes that are planned. “We are finishing about 60 to 70 homes a month,” Teed-Bose says. “Within two or three years, there will be 9,000 people here. That’s when we’re going to have the critical mass to get a grocery store and other things.”
Another big development in the planning stages is The Grupe Co.’s Sanctuary, to the west of Interstate 5 in Stockton.
Grupe is keen to let people know that Sanctuary is different. Shane Hart, senior vice president with Grupe, views it as the biggest and most innovative project that Grupe has undertaken.
“Forty years ago we did Lincoln Village West, which had the first manmade lake in San Joaquin County. We were the first in the county to underground the utilities and use a cable TV system.”
In the late 1980s Grupe built Brookside, a 3,000-home country club community that included rolling terrain and public artwork, “things that no one had done before in Stockton,” Hart says. Sanctuary, which will be twice the size of Brookside, will have several unusual features, according to Hart. “First, we’re planning a forested entry. We’ll divide the lanes on the road coming in and out. For a quarter mile there’s going to be a forest. You won’t see the traffic coming the other way; you won’t see the buildings on the other side.”
Sanctuary will include a “town center with restaurants and shops and a corner grocery store. There will be residential space over the retail, which is something new for Stockton. And there will be a lot of activities ... interactive fountains and fountains in the five-acre lake,” Hart says. “There will be a marina — people will be able to fish or use radio-controlled boats in the town center area.”
A 15-acre olive orchard and a 35-acre vineyard are also planned. The olives will be crushed to produce Sanctuary Olive Oil, the vineyard will produce Sanctuary Wine, and there will be a private wine club for Sanctuary residents.
The lakes in Sanctuary will resemble those in Grupe’s West Sacramento development, The Rivers. “We design the lakes so that they have fingers” reaching through clusters of homes, giving many residents a lake view, Hart says.
“Sanctuary is almost 2,000 acres, and when it’s built out, it will have about 7,000 homes,” Hart says. “We submitted our application to the city in May 2005.” The environmental-impact report is in progress. Sanctuary will need approval from the city of Stockton and the Local Agency Formation Commission. If all goes smoothly, the first Sanctuary homes might be built in 2009.
Other midsize new home developments in San Joaquin County include The Grupe Co.’s Destinations, off Davis Road in Stockton, which will have about 476 homes on 80 acres. Ryland Homes, a Calabasas-based company active in 27 metropolitan areas around the country, is selling large homes priced in the $700,000s and $800,000s at Linne Estates in Tracy, and has a 675-home development coming up in Stockton.
Greg Paquin, president of The Gregory Group in Folsom, has tracked real estate trends for years. “The most exciting thing in Stockton is the Eight Mile Road corridor between Stockton and Lodi, which is being planned for future residential,” Paquin says. “I think Stockton will make a push forward in terms of infrastructure, office and retail, in addition to housing.”
The rising prices for developable land in San Joaquin have sent some local developers farther afield. Steve Moore, vice president of operations with Bennett Development in Lodi, says that four years ago the company had several projects close to home. “But the price of land jumped rapidly and we did not jump on fast enough” for the current round of projects, Moore says. Bennett is now working on projects in Colusa and Merced counties.
Moore says Bennett Development expects to get back into the San Joaquin County market. “We’re looking for opportunities. Stockton is working on their general plan. Once it’s adopted and there’s a better picture of what land will be available, that will set the tone for what will happen there. And Lodi is working on their general plan, which will define what will happen there for the next 10 to 20 years.”
