View the full article HERE with your San Diego Business Journal subscription.
"One of the last big chunks of open land in Oceanside is being developed by a Carlsbad company into a residential neighborhood of single family homes and townhomes with a retail component.
Estimated to cost $160 million to build, the project as designed by California West Communities calls for construction of more than 300 residences on a 71-acre site in northeast Oceanside on the border with Vista.
The site is bisected by Melrose Drive at the intersection where Oceanside Boulevard turns into West Bobier Drive and within walking distance of a Sprinter light rail station.
The homes are designed to be “attainable” with an eye toward millennials buying their first home and baby boomers who are downsizing.
Millennials’ House Hunting
“Millennial buyers, as they settle down and have a family, they want a little more space and townhomes become a market for them,” said Matthew Thorne, California West Communities vice president of land acquisition.
“We’re seeing a lot of them starting to enter the market in a significant way,” Thorne said.
The Oceanside property was zoned for estate residential when California West acquired the property in 2013.
With that zoning designation, the homes would have to be priced at more than $800,000, Thorne said.
“Over the last few years, we’ve been trying to provide more attainable housing within the community,” Thorne said.
Zoning Change
The city agreed to a zoning change which allowed for a denser development of townhomes and single-family homes, with prices ranging from the mid-$400,000 to the mid-$600,000.
“For San Diego standards, that’s a very reasonable price for new housing,” said Mark Goldman, a real estate lecturer at San Diego State University.
“They’ll be quite a welcome addition to our housing supply,” Goldman said. “It makes its price at about the median price range, so it should be acceptable to a lot of people.”
CoreLogic, which tracks housing prices, pegged the median price of a single family home in San Diego at $583,000 in August.
With apartment complexes developed nearby, it made more sense to use the Oceanside property for a denser development than estate homes, Thorne said.
“We thought this was a better concept for the community,” he said.
The project will be a mix of 38 single family homes and 268 townhomes ranging from 1,200 square feet to 1,600 square feet.
Commercial Spaces
There’s also 20,000 square feet of commercial space on a 9.7 acre portion of the project on the west side of Melrose Drive at Oceanside Boulevard.
The first floor of the commercial space will be designed for retail use with offices on the second floor, Horne said.
Some of the townhomes will have 200 square-foot to 400 square-feet of space set aside as work-at-home areas.
“The person who buys the home can open up a small business, like tax planning or maybe a salon,” Horne said.
A 32.6 acre northern portion of the site will be preserved as open space.
The overall project is divided into three planning areas — the 9.7 acre mixed use portion at the southwest corner, a 6.2 acre portion along Melrose Drive abutting the open space, and a 19 acre portion at the southeast corner bracketed by West Bobier Drive to the south, Sports Park Way to the east, Melrose Drive to the west and the open space to the north.
Plans are to start construction with site grading in 2019 and finish by 2022.
Among similar projects by California West is a 139-home development in El Cajon the company has dubbed “Main Ranch” on the site of a former Home Depot store.
Two-story homes in Main Ranch range from 1,504 square feet to 1,810 square feet and are priced at the mid-$400,000 range.
“The East County is just a fantastic market,” Thorne said. “There’s tremendous demand. People who grew up there stay there.”
Construction of Main Ranch is underway with plans to finish in 2020.
Pricier projects by California West include Encinitas Enclave, an estate home community where prices start at round $2 million for homes ranging from 2,800 square feet to 3,250 square feet with up to six bedrooms, 5 ½ bathrooms and four-car garages.
In-Fill Focus
Focusing on in-fill developments, California West has built more than 35 projects in San Diego County since the company was formed 25 years ago.
With interest rates rising, the market for existing home sales has cooled in San Diego County and nationally, but Thorne said the effect on the market for new homes has been negligible.
“The traffic has slowed a little, but the sales rates are still consistently strong,” Thorne said. “Across all the different product types, we’re seeing solid demand. The entry level to move-up market seems the strongest right now.”
With interest rates averaging at a little below 5 percent, “Those are still attractive rates,” Thorne said. “There’s a lot of different loan programs available.”"
