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Equal Housing Opportunity |
Frank Donato is a long time Valley Resident and Businessman, and a V.P. Account Manager for Fidelity National Title. Frank currently serves as A.V.E.K. Water Board Director (since 1987), and has served as A.V. Fair Director (1997-2001) and North County General Plan Advisory Council Member (1981-1986). Frank is also a Wine Grape Grower and Consultant and Owner/Partner of Antelope Valley Winery. We thank Frank for sharing his knowledge and unique perspective on current issues!
Fourth Quarter 2005
AV News Briefs:
October November
December |
| Antelope Valley News – October 2005 |
| Sept 9- Palmdale City officials, looking to future growth which is evident everywhere, take the first steps toward developing a 500 megawatt electricity generating facility. City Manager, Bob Toone, said the primary goal here is to "provide cheaper energy to the aerospace industry". Presumably, this is being done as a magnate for more growth in this industry. Toone said that secondary goals are to provide cheaper power to Palmdale residents and to assure enough power to accommodate future growth. Palmdale's Community Redevelopment Agency, over the next 2-3 years, will pay $5.5M to Inland Energy, who will in return use the money to obtain, on the City's behalf, the state permits needed to develop the power plant. Inland Energy has successfully gone through this process for the City of Victorville. Inland Energy's compensation would be 5% of the future operating profits, and reimbursements on any out of pocket costs associated with the permitting process, i.e. hotel and traveling costs etc. While no definite site has been chosen, this much is known: the site will be 20 acres and will use 2.2M gallons of waste water per day, with the City leaning towards east Palmdale where Plant 42 is located and where the City has more flat land for housing tracts. 500 megawatts of electricity can supply 375,000 homes. Currently, Palmdale has a population in the area of 136,000, which is forecasted to grow to 450,000 over the next 15 years. Once acquired, city officials say the permits could be worth $20M. After obtaining the permits, the City would sell them to Edison Electric or some other major utility for the plants construction. In closing, Toone said, "This is probably not the only plant we would build. We could build smaller ones, located next to industrial areas, with the idea to provide cheaper energy for industrial users to make the community more competitive in attracting business and jobs." |
| Sept 11th- Los Angeles County Sheriff's Dept officials say that the scheduled opening of their new station, at the SEC of Sierra Hwy & Ave Q in Palmdale, has been delayed by last spring's rains. The station was suppose to open by December of this year, but now officials say February 2006 is the new target date. The new station will deputy's time, valuable time that will allow them to spend more time on the streets, rather than driving to the Lancaster station to process an arrest. Officials say that the new station will save 90 minutes per arrest. |
| Sept 12th- Perhaps to raise money to give his November special election a badly needed boost, Arnold Schwarzenegger makes an appearance at a $250 per plate dinner in Lancaster at the AV Fairgrounds. The governor pitched the importance of his 3 initiatives that will be on the November ballot. The most important issue on the ballot, is how political boundaries are drawn (meaning state senate and assembly district lines) saying now, "the system is rigged" and that "the politicians are choosing the voters, instead of the voters choosing the politicians." According to a Field Poll, only 36% of the electorate would re-elect the governor today, versus the 56% it was in February. Schwarzenegger did say that he had been "bloodied" in TV and radio ads by the unions and special interests, but also said, "I am not bowed, nor will I give up." 1200 people attended the event, raising over $300,000. In finishing, Schwarzenegger said, "The economy is moving again. We need the three R's. We need recovery, reform, and to rebuild." |
| Sept 20th- Speaking before the AV Building Industry Asso, Victor Lindenheim, director of the Golden State Gateway Coalition, says that traffic to the Los Angeles area from the AV, and back, "faces a future crisis". Lindenheim said that LA County's Golden Transportation Triangle is a disaster and will get worse as it is expected to grow by 65% over the next 10 years and 114% over the next 20 years. One of the causes is that 40% of all of America's imports leave via the LA basin area, either from the harbor or LAX. The director went on to say, while the AV is providing for housing needs, it will also need to provide for future transportation needs. The AV population is now in the area of $400,000 and is expected to go to 1.4M over the next 25 years. The Coalition is strong advocates of widening the Fwy 5, Fwy 14, and Hwy 126, which goes west to Ventura from the Fwy 5. |
| Sept 29th- Finally some movement towards the Veterans Home in Lancaster, at the NW corner of 30th West and Ave I. Although not much at this time, proponents of the Vets home were happy to receive a rough draft of the Environmental Impact Report, along with an artist's rendering and a completion date. Here are the projected time lines: comment period ends on Oct 24th of this year; 2006 will be devoted to final drawings and plans, and bidding the project; by March of 2007, it is hoped that the Feds will get on board and fund the project; if all goes well, construction could begin by the summer of 2007. |
| Sept 30th- So Cal Edison announces that it will seek approval to upgrade the power system and power delivery in the AV. The improvements will allow Edison to deliver as much as 1,100 more megawatts of additional electricity, which is enough for 825,000 homes. One phase of the improvements will include a 26 mile transmission line, which will originate from a substation at 95th West & Ave J. Once that is approved, Edison will then seek approval for 67.5 miles of additional lines. When developed, the new lines will extend from the Vincent Substation, (which is south of Palmdale), traversing northwest, then north to Mojave, then NW to Tehachapi. The poles for these new transmissions lines will have a 80 sq ft footprint, versus the older, larger poles, that have a footprint of 2,500 sq feet. Edison has adjusted their proposed route to avoid existing homes and future school sites. Edison will spend between $200M and $300M on the expansion. |
| Oct 4th- The Antelope Valley Community College and the Bushnell family, a private donor, finally come to an agreement for a new east Palmdale college campus. The negotiations had been ongoing since the early 1990's. The new college campus will be located on 69 acres at 37th St East and Barrel Springs Rd. The area is known as Palmdale Hills. The Bushnell family, in the mid 1990's, which owned 500 acres in the area at that time, offered 100 of those acres to the college, if the college would pay for infrastructure to the area, allowing development of the remaining 400 acres. Later, the offer was revised down to the present 69 acres. The remaining residential acreage, subject to an agreement with the college, has been sold to Western Pacific Housing. The college has agreed, in exchange for the land, to pay $5M for infrastructure and grading of the site, which includes street construction. The housing will be built by Western Pacific Housing, and will extend from Barrel Springs Rd to Ave V, and from 37th St East to 47th St East. Ground breaking for the new college could take place as soon as the middle of next year. The Bushnell family is the founder of Bushnell Opticals, a famous maker of binoculars and other optics. |
| Oct 6th- Newly appointed to the Los Angeles World Airports Board of Airport Commissioners, Valeria Velasco takes a tour of Palmdale Regional Airport, and flies to Las Vegas aboard one of Scenic Airlines shuttle planes. At the air terminal, in a meeting with Palmdale Mayor Jim Ledford, Velasco says, "The whole reason I am here is to promote air traffic regionalism." Velasco was appointed to the Board by newly elected Los Angeles Mayor Antonio Villaraigosa. Villaraigosa is highly in favor or dispersing LAX air traffic to outlying airports, which is known as "regionalism". The new LA Mayor said his goals in relation to LAX is to increase safety of air operations under the control of LAWA, to develop a regional air traffic plan so that no one area bears the full weight of meeting So Cal air passenger needs, and to operate the airports in a environmentally sensitive manner. Velasco went on to say, "This is not like standing in line at LAX for 45 minutes and taking off your shoes to be cleared for boarding. This is lovely." Of the AV in general, Velasco said, "The area is so beautiful. I want to have a LAWA Board meeting up here so that other commissioners see the area too." |
| National Housing Market- The following housing data is subject to large sampling and other statistical errors. Substantial revisions in this data are common. It can take up to 6 months to firmly establish a new trend in sales activity. |
| August housing starts (Commerce Dept), released September 20th, down - 1.3% to a seasonally adjusted annual rate of 2.009M. The decline was larger than expected. Although it is at a 5 month low, new construction remains very strong. |
| August building permits, (considered a leading indicator and a signal of future activity) also released September 20th, down - 2.2% to a annualized rate of 2.124M. Permits for single family homes were down - 1.3%. Analysts say that hurricane Katrina had "minimal" impact on these numbers. |
| August existing home sales (Natl Asso of Realtors), released Sept 26th, came in well above forecast, rising 2% to a seasonally adjusted annual rate of 7.29M, the second highest number on record. The forecast had been for sales to fall to 7.11M. August sales were up 7.8% vs August of 2004. Year over year, the median price of a resale home rose 15.8% to $220,000. The inventory of homes in August rose 3.5% to a 4.7 month supply, the highest supply of homes since November of 2003. Next month's report is expected to show weakness in the south, as the effects of Katrina will show in September's numbers. Many of the MLS services along the Gulf coast were knocked out of commission, with many being "taken off the market" by storm damage. A healthy jobs market, and mortgage rates that are still below 6%, are reasons the housing market continues to put up good numbers. |
| August new home sales (Commerce Dept.), fell on their face, falling - 9.9%, to an annual rate of 1.34M new homes per year. Analysts were quick to point out that this was just one weak month, and not necessarily the beginning of a trend. In August, supply was at the 5 month level at 479,000 new homes. The median price of a new home is now $220,300. In the east, new home sales were down 22%, while in the west, they were down 18%. |
| AV Home Market News |
| Ignoring the forecasts of the end of the housing boom, the median price of a So Cal home went to new highs in August. The median price of a resale home in southern California went over the $500,000 for the first time ever, at $501,000. Also in August, the median price for a new home in southern California was up +1.5%, vs July, to $476,000. Sales volume, in both July and August of this year, were up about 10% vs July and August of 2004. Said Marshall Prentice, Dataquick President, "Interest rates haven't really gone anywhere. Demand still appears to be strong. There are more homes on the market now than last spring. As an investment, home ownership still looks pretty good compared to the alternative. So while we're certainly closer to the end of the cycle, the market is still balanced and stable." Dataquick also says that indicators of market distress are still largely absent, with foreclosure activity bottoming, but still low. In Los Angeles County, median home prices were up 21% in August of 2005 vs August of 2004. |
In mid September, 700 developers, city/state officials, and even some federal officials, gathered at the Ontario Convention Center for a housing summit to discuss making homes in California more affordable. Here is a summary of some of the statement, facts, and options discussed at the summit:
|
Here are how median home prices in the
Antelope Valley break down by region. |
| While home prices in some areas of So Cal are flattening out, or even dropping in some areas, the median price of a home in the AV still shows good strength. But even in the AV, the rate of increase, year over year, is beginning to slow down. Dataquick reports that the median price of a home in Santa Monica and Pasadena, have actually fallen some 20% when compared to their August 2004 median prices. The Santa Clarita area (Valencia) has seen median home prices rise 18% vs August of 2004, a healthy gain by most market standards, but a drop in the rate of appreciation. In Santa Clarita, median home prices range in value from $544,000 to $658,000. Compare that to AV home prices above, and you have a very good reason why new home buyers will continue to keep coming to the AV. Analysts feel that a continued housing shortage will fuel double digit gains for homes statewide. In 2006, the median price of a home in California is expected to rise to $575,000. Housing analysts say that Cal will build 200,000 new homes in 2005, but that this falls short of the 250,000 needed annually to keep up with the demand of a growing population. These same analysts say that rising mortgage rates and rising prices are expected to reduce overall sales volume of homes by about 2% statewide. Affordability, the percentage of Californians that can and do own their own homes, is expected to drop to an all-time low, to 15%. Price barriers to home ownership will continue to push buyers inland (the AV et al), with some even going out of state and changing jobs. |
| AV New Home Sales Data
(source: The New Housing Monitor, a Hanley Report) As of August 14, 2005 (most recent data available) -New Homes sold year to date - 3,064 -New homes sold since last month- 318 -New homes selling per day - 13 + -New homes projected to sell for all of 2005- 4,945 2004 - total of all new homes sold- 2,503 2003 - total of all new homes sold- 1,820 2002- total of all new homes sold- 1,162 1990- total of all new homes sold- 5,000 |
Number of new home builders in the AV- 35 Open subdivisions with sales in 2005- 73 Home builders in the AV (alphabetical order)
|
| Land Market |
| Supply closed out September at 2,069, up 5% versus August. The prior month's rise in supply was 6.6%. Supply gains in June and July were in the 1% area, but now, in back to back months, we have supply gains of over 5%. From a land owners standpoint, this makes perfect sense; higher prices will always bring new supply onto the market. Not just in real estate, but in any market. Astute land owners know a good selling opportunity when they see one. If this trend can persist, the supply of land rising faster than the demand, it would eventually lead to weaker land prices. If so, that scenario could take many months to play out, perhaps over a year. However, that is a big "IF", for presently, we only have two months of above trend rising supply. This is not enough data on which to base a firm conclusion, but it does bear watching. While supply has jumped up over 10% the past few months, it is up just 8.7% year to date. So, maybe we have an early warning that supply is about to balloon, or maybe we have just a two month, meaningless aberration. It is my own view, that supply is the least important of the two, between supply and demand, that demand is the more important number to watch, and that number, as you will see below, remains strong. Longer term, we cannot dismiss the effect a growing supply could have on the market, but for now, it bears only watching, and is not an immediate concern. |
| Supply numbers in
perspective: Supply at end of Aug- 2,069 Supply change from last month: + 5% Supply at the end of 2004: 1,902 Supply change, year to date: + 8.7 % Supply in Sept 05 vs Sept 04: +3.1% |
| Why is the supply number important? The market value of all things, eventually, comes down to the basic principle of supply and demand. The supply number helps to tell us the psychological condition of buyers and sellers, by it's change and it's rate of change. Large drops in supply could be signaling speculative behavior as investors fight it out to get into our market. If supply were to increase rapidly, that could be telling us that buyer's are backing off, and/or, that numerous new seller's are coming into the market. In combining this data with the demand number below, we can assess the current status of the land market. When supply numbers approach historical highs and lows, they can also be useful in signaling major turning points. Example: at the peak of the 1988-90 market, supply made a low in May of 1989 at 587. In hindsight, May 1989 was at or near the point of peak speculation in our market, as demand over-whelmed supply, drawing it down. The value in following supply, is not in the number itself, or what any one number might mean. The value comes from when it changes, how much it changes, and magnitude of that change. |
| Demand: September demand (298), while below 300, is close enough to say that no major trend change is occurring here, at this time. The market is still strong and has good momentum. We have now had land sales at 281 or higher, six months in a row. Four of the past seven months has seen 300 or more land sales per month. Those of you that have been with me since the 1990's, probably remember many months when we did just 20-25 land sales. This illustrates, clearly, that markets do change, and can change dramatically. After the first 8 days of October, we have 83 land sales, which is about 10 per day. It's only 8 days, but at that pace, October would do 300 land sales. If you look at "Months Needed to Sell All Existing Land Listings", this number appears to have peaked in May, at 5.6 months. |
| Since May, the time required to sell all land listings has risen, from 5.6 months in May to 6.94 in October. During this period, supply has been rising, and rising faster than the current demand. Presently, this is nothing to be alarmed of; I view it as a market fluctuation in the face of mildly rising supply. I would be much more concerned if this number were to drop due to falling demand, vs rising supply. |
| Demand numbers
in perspective: Land sales year to date- 2,570 Sept 2005 vs Sept 2004- + 41 % Land sales projected for this year- 3,426 Land sales in all of 2004- 2,372 Land sales in all of 2003- 1,240 Land sales in all of 2002- 679 Land sales in all of 2001- 407 Land sales in all of 2000- 307 |
| Average land sales (in 2005) per month- 285 Average land sales (in 2004) per month- 198 Average land sales (in 2003) per month- 103 Average land sales (in 2002) per month- 56 Average land sales (in 2001) per month- 34 Average land sales (in 2000) per month- 26 |
| The Beginning: Land sales volume began to increase dramatically in April of 2002. For this reason, I am calling April 2002 the beginning of this bull market in AV land. This means that the bull market in AV land, is now 42 months old (3 years and 6 months). |
| Supply & Demand Dynamics |
No major changes here. This is a Bull market until proven different. The character of this market has been unchanged for many months. Inventory, or supply, has been in a fairly narrow band of 1,750 to 2,069. Demand has been strong with sales at or near new volume high's in five of the last six months. For the past few months, supply has slightly faster than parcels have sold, but as discussed above, this is not significant at this time. September's numbers reveal only more of the what we have had over the past three years- a strong land market. Supply and demand numbers have their greatest value when they move to historical extremes. When these numbers, in tandem, move to historic extremes, they can be helpful in determining market bottoms and tops- i.e. major turning points. Presently, as a pair, they are not at extreme levels, nor anywhere near extreme levels, so I see no pending warning signs re: this market. While the market is strong and liquid, it also has more than it's share of risk, price risk. This is not a market where one can throw money at it without some thought, and expect to make a profit within 1-2 years. After all, this is a seller's market, which by definition, favors sellers. Good values and bargains are very difficult to find. This is why Sellers should be running to their local broker to place their sell order. Sellers should not fall into the trap of putting off selling because they don't need the money, or because they are confident the market will be strong indefinitely. The only constant in markets, is that eventually, they do change. Sell now when the market is good. The challenge of what to do with one's sale proceeds is a separate issue. In a rising interest rate environment, there is nothing wrong with cash in the bank, or a money fund. I know that the temptation to buy this market is almost overwhelming, but Buyers should be careful and patient, waiting for the right opportunity. This means taking into consideration both location and value, absolute value, not relative value. |
| -
Frank Donato, October 2005 |
| Information
presented above has been compiled from reputable sources, and is
deemed reliable but not guaranteed. All opinions expressed are those
of the Author. |
| Antelope Valley News – November 2005 |
| Oct 9th- Work
on the remodeling of the AV Mall is progressing on schedule. Presently
the outside courtyard, the south and main entrance, is being done.
Forest City Enterprises, which is the only owner the mall has had
since it's opening in 1990, felt it was time to give the mall a more
contemporary look. Construction began in May, with the interior work
being done in November, and the outside work finishing up in December. The renovation is part of an effort to attract more national retailers and to create an open, bright, and inviting atmosphere. |
| Oct 10th- Krispy Kreme doughnuts closes it's west Palmdale store, located at 540 W. Ave P, just west of the Fwy 14. The closure had nothing to do with local sales, as they were very good. The closure was about a larger consolidation deemed necessary by the owners, Great Circle. The company is under serious financial pressures brought on by allegations of book keeping irregularities. The Palmdale store is owned by Great Circle Marketing which has filed a law suit against Krispy Kreme. The suit alleges that the parent company, KK, misappropriated monies for marketing and advertising. The law suit also alleges deceptive business practices. Krispy Kreme is also a target of a criminal inquiry by federal prosecutors in New York. |
| Oct 20th- The
Greater Antelope Valley Economic Alliance sponsors a tour for visiting
real estate brokers. Most of the attending brokers were from
the Burbank-San Fernando Valley area. Visiting brokers were given
a bus tour of the Palmdale and Lancaster areas, then treated to a
reception at the Cascades restaurant at the Rancho Vista Golf Course.
The brokers were also given a complimentary copy of GAVEA's 2005 Economic
Roundtable Report, which is a comprehensive study of the AV's demographic,
economic, housing, health-care, education, weather, and cost of living
statistics. GAVEA is hopeful that the visiting brokers will act as
good-will mbassadors for the AV, and bring their clients up here to
buy buildings and land to open up new businesses, which of course
would also expand employment. 250 brokers attended the event, with
60 of those being from outside of the AV. At the reception, So Cal
Edison announced an incentive program, offering five year declining
discounts off of a customer's electric bill. For the tour, Palmdale and Lancaster economic directors were the guides, where it was pointed out that the AV had 25,000 single family lots under some form of development. |
| Oct 19th- Palmdale's new east side park was toured by the local media. Called Oasis Park, it is located at 40th St East & Ave S. The recreational center includes a water park, a 12,750 sq ft gymnasium, a 965 sq ft multi-media studio, a youth room oriented to teens, and a meeting area that can be partitioned into 3 separate rooms. With a touch of humor, the water park has been named the Dry Town Water Park & Mining Co. The park opened to the public on Monday, Oct 24th. To man the water park, Palmdale officials will be hiring 45-50 lifeguards by the summer. |
| Oct 20th- Two years from it's ground breaking, the Hampton Inn in west Palmdale, announces it has been open since Sept 28th. Fully staffed at 20, the hotel is already full with corporate live-ins. Aerospace, government, and occasional film crews will keep the hotel at or near full capacity. The hotel is located at 39428 Trade Center Dr, near the Fwy 14. The hotel offers 85 rooms, 30 of which are suites. The hotel manager recommends calling 2-3 weeks ahead of your arrival date to ensure a room (661-265-7400). Hampton Inn is owned by the Hilton Family of Hotels. |
| Oct 26th- FED-X announces that their new 55,000 sq foot delivery hub in west Palmdale is up and running, and has been so since Sept 9th. The facility is located at 4th St West & Ave O, in the Fairway Business Park. The center replaces two smaller facilities in Palmdale, and is currently handling 6,000 to 7,000 packages per day. During the holiday season, that number is expected to rise to 15,000 per day. The center employs 55 workers and handles ground service for the Acton, Palmdale, Lancaster, Rosamond, Mojave, California City, Boron, Barstow, Fort Irwin, Victorville, Apple Valley, Adelanto, Littlerock, and all areas in between. |
| Oct 27th- A
plan to handle Palmdale's waste water is approved by the county and
city officials. Palmdale's Sanitation District 20, will either lease
or eminent domain 5,140 acres of land for disposal and 700 acres for
treatment. While the borders of the affected area look a bit
like a "Rhorshock picture", they are, 60th St East on the
west, then east along Ave L to 108th East, north to Ave K-8, east
to 150th St East, south to Ave L-8, then west 105th East & M,
south to P-8, west to 85th St East, and finally, NW back to Ave L.
Most of the affected land belongs to Los Angeles World Airports. That land will be leased, then sub-leased to farmers, who will grow food for farm animals, mostly alfalfa. Land in the affected area, that is owned by private citizens, will go through the eminent domain process. Essentially, 700 acres is needed to treat the water, with the rest of the acreage needed as a place to put the water, once treated. Lancaster has a similar plan, east of 50th St East, north of Ave G. |
| Nov 3rd- The California High Speed Rail Authority, by a 6-0 vote, approves of an Environmental Impact Report for the 700 mile project that will run through the AV. The vote clears the way for the Board to begin buying rights-of-way, once it has funding. When completed, the high speed rail system will link San Diego, Los Angeles, Fresno, San Francisco, and Sacramento. The Los Angeles to Bakersfield leg of the route will go through the AV. To pay for the first leg of the system, a $9.9B bond issue to slated to be on the 2006 ballot, however that date may be pushed back to 2008 to give the state more time to improve it's financial condition. For the stop in Palmdale, no specific site has yet been chosen, but Palmdale's Transportation Center and/or it's Airport Terminal at 25th St East & Ave O-8 are logical stops. |
| Nov 4th- An east Palmdale fast food restaurant is being converted into a Starbucks Coffee house. The new Starbucks will be located at Palmdale Blvd and 3rd St East, and will have drive through access, as the new coffee house is only minutes from the Fwy 14 for daily commuters. It is slated to open later this month. |
| National Housing Market- The following housing data is subject to large sampling and other statistical errors. Substantial revisions in this data are common. It can take up to 6 months to firmly establish a new trend in sales activity. |
| September housing starts (Commerce Dept), released October 19th, up +3.4% to a seasonally adjusted annual rate of 2.108M, the highest level since February. Housing starts have been above an annualized rate of 2M, six months in a row, and in 10 of the past 12 months. For all of 2004, total housing starts were 1.956M |
| September building permits, (considered a leading indicator and a signal of future activity) released October 19th, up + 2.4% to a seasonally annually adjusted rate of 2,189,000. Year over year, building permits are up + 7.4%. Permits for single family homes, in Oct, were up a healthy + 4.4%. |
| September existing home sales (Natl Asso of Realtors), released October 25th, came in flat, or nearly unchanged. The seasonally adjusted annual rate was 7.28M, the second highest ever. Year over year, the median sales price is up + 13.4% to $212,000. Based on the Sept sales pace, supply is at 4.7 months. Analysts say that the storm damage along the Gulf actually stimulated home sales, as firms rushed to relocate employees to areas outside the damaged areas. |
| September new home sales (Commerce Dept.), rose + 2.1% to a seasonally adjusted rate of 1.222M. Sales in Sept bounced back after weak August of -11.6%. Inventory of unsold new homes, rose to 493,000, a new record which represents a 4.9 month supply. Year over year, the median sales price of a new home is up + 1.9% to $215,700. Year over year price gains peaked last December at + 17.1%. This report supports anecdotal evidence that various housing markets around the country have cooled. |
| AV Home Market News |
| The housing market in California,
as a whole, remains healthy. While in some markets, supply
is rising, and prices softening, overall, California had very good
sales in September. The median price of a existing home in California
in September was $455,000, up + 17.3% vs September of 2004. Although
up vs last September, the median price actually fell $1,000 vs August's
$456,000. The market most affected seems to be the San Diego area,
as prices there have lagged, on a percentage basis, behind most other
areas of the state. San Diego County has had single digit year over
year appreciation for 5 months in a row. Said an analyst about the
San Diego market, "We don't see a pricing bubble, but a leveling
off. There's a lot more supply today vs one year ago." This behavior
in San Diego may be instructive of what we may see next year in the Los Angeles and surrounding markets, not a bubble popping, but a winding down and flattening out of sales. |
| Here are
how median home prices in the Antelope Valley break down by region.
(Data Quick News) Region median price 10/05 % gain since price per sq foot May 2004 Mid Lancaster $254,000 + 33.4% $186 East Lancaster $273,000 + 27.9% $176 West Lancaster $320,000 + 18.5% $188 Littlerock $276,000 + 33.3% $243 West Palmdale $386,000 + 17.0% $189 Mid Palmdale $291,000 + 24.9% $199 East Palmdale $320,000 + 30.6% $197 If you compare these numbers from the last few months, you will notice that median home prices have fallen about 8-10% across the board. Littlerock's higher price per square foot is due to the fact that many of the homes in Littlerock are on acreage so the buyer is paying up for more land, vs a tract lot back in town. The new home market is booming, with building permits year to date through September, up 56%. During that same time frame, Lancaster has shown the strongest new home market, with their building permits up 91.7%. The total dollar value of new building permits pulled, year to date through September, is $505M according to Construction Industry Research Board. Kern County officials say that new building could surpass the $1B mark and break the 2004 record. In the AV, Kern County includes Rosamond, Mojave, and California City. And while those markets are having their own boom, much of that $1B figure will be carried by the Bakersfield area. Through the 2nd Q, Cal City total values of new construction stood at almost $21M, which is an improvement of 90% vs the same time period in 2004. |
AV New Home Sales Data (source: The New Housing Monitor, a Hanley Report) As of August 14, 2005 (most recent data available; I should have updated data for next month's newsletter) -New Homes sold year to date - 3,064 |
| Home builders
in the AV (alphabetical order) American Premier Beazer Homes Capital Pacific Homes D R Horton Eliopoulos Enterprises Empire Homes (Anaverde) Fieldstone Communities First Pacifica Forecast Homes Frontier Homes Gibraltar Homes Harris Homes Hearthside Homes John Laing Homes KB Homes K. Hovnanian Co. Larwin Co Lennar Corp. Matthews Homes MBK Homes New West Builders Pacific Communities Pacific Gateway Homes Pinnacle Communities Pulte Homes Rancho Vista Development Richmond American Standard Pacific Stratham Group Sun Cal Communities (Ritter Ranch) Tandis Homes Trimark US Home Corp. Warmington Homes Western Pacific |
| Land Market |
| Supply closed out October
at 2,157, up 4.25% vs September. September's supply was up 5% vs August.
Supply has now climbed 6 consecutive months. Over the past 3 months,
supply has risen 17%. If this trend persists, the supply of land rising
faster than the demand, it would eventually lead to weaker land prices.
However, more time and data is needed to draw any hard conclusions.
This scenario could take many months to play out. It is my own view,
between supply and demand, that supply is the least important of the
two. Even though overall supply may be up, in certain areas of our
land market, supply might be tight. One example of this, would be
west side custom home sites. Supply in this category has been very
tight, and consequently, prices have moved up to record levels. Longer
term, we cannot dismiss the effect a growing supply could have on
the market, but for now, with demand still strong, it bears only watching,
and is not an immediate concern. Supply numbers in perspective: Supply at end of Oct- 2,157 Supply change from last month: + 4.25% Supply at the end of 2004: 1,902 Supply change, year to date: + 13.4 % Supply in Oct 05 vs Oct 04: +7.5% |
| Why is the supply number important? The market value of all things, eventually, comes down to the basic principle of supply and demand. The supply number helps to tell us the psychological condition of buyers and sellers, by it's change and it's rate of change. Large drops in supply could be signaling speculative behavior as investors fight it out to get into our market. If supply were to increase rapidly, that could be telling us that buyer's are backing off, and/or, that numerous new seller's are coming into the market. In combining this data with the demand number below, we can assess the current status of the land market. When supply numbers approach historical highs and lows, they can also be useful in signaling major turning points. Example: at the peak of the 1988-90 market, supply made a low in May of 1989 at 587. In hindsight, May 1989 was at or near the point of peak speculation in our market, as demand over-whelmed supply, drawing it down. The value in following supply, is not in the number itself, or what any one number might mean. The value comes from when it changes, how much it changes, and magnitude of that change. |
Demand in October (274),
while below 300, was another strong month of land sales. October
land sales, vs Sept, were down 8%. Over the past 6 months, land
sales have averaged 298. While 274 land sales is the lowest monthly
total since Feb (236) of this year, it is still a strong number.
The market is still strong and has good momentum. Four of the past
eight months has seen 300 or more land sales per month, with the
Demand numbers in perspective: |
| The Beginning: Land sales volume began to increase dramatically in April of 2002. For this reason, I am calling April 2002 the beginning of this bull market in AV land. This means that the bull market in AV land, is now 42 months old (3 years and 6 months). |
| Supply & Demand Summary: No MAJOR changes here. This is a Bull market until proven different. The overall momentum of this market is still positive. Inventory/supply is climbing, but land sales are still putting up good solid numbers. In the coming months I will watch these two for any indications of a major trend change, of which, so far, I do not see. Each individual investor should consider their risk tolerance/holding period before putting new money into this market. The Antelope Valley has a great future. This was true in 1970, 1980, 1990, 2000, and it is still true today. Anyone who purchased carefully selected acreage in any of these zero years, has made very good money. |
| -
Frank Donato, November 2005 |
| Information
presented above has been compiled from reputable sources, and is
deemed reliable but not guaranteed. All opinions expressed are those
of the Author. |
| Antelope Valley News – December 2005 |
| Defense & Aerospace News |
| Mojave Airport officials are hopeful, that with the success of SpaceShipOne, Burt Ruttan's spacecraft that successfully went into outer space twice within a two week period, that the new industry of commercial space travel will make it's home at Mojave Airport. Also referred to as personal space flight, Rutan believes that this will be a budding industry for the Mojave area. Rutan believes that SpaceShipOne has tackled the safety issues and that the space travel now is about as safe as flying was in the early days of commercial aviation. Rutan and Richard Branson, founder and owner of Virgin Airways, have announced a joint venture to offer space flights for $200,000 per person. The flights will take place on a larger version of SpaceShipOne, which is now under development. The new craft will carry a pilot, co-pilot, and 7 to 10 passengers. Passengers would attend a two day space camp in preparation for the flight. Rutan believes, that if enough space crafts are built, as many as 100,000 new astronauts could be created in the first 12 years. |
| In a study released
by Federal Aviation officials, three local southern Cal airports showed
up as having the most "runway incursions" in the country.
An "incursion" is when a plane on the ground gets
too close to a plane taking off or landing, causing a "near miss".
The airports, which were ranked 1,2, & 3 in the country, are John
Wayne (1) in Orange County, Long Beach Airport (2), and of course,
LAX (3). LAX, as it draws a greater number of passengers, has the
greatest potential for a catastrophic accident. LAX, since 1999, has
had between 6 and 10 incursions annually. In 2005, year to date, LAX
has had 8 incursions, none of which were considered serious (according
to officials). If county officials are looking
for a good reason to disperse air traffic to outlying areas, like Palmdale, is there a better reason than passenger safety? |
| Boeing has announced that they will build their version of the next generation unmanned combat aircraft at their Plant 42 facility in Palmdale. Called the X-45C (X is for experimental), the craft, upon completion, will be flight tested at Edwards Air Force Base. The intention here is to develop a craft that will meet the needs of both the Air Force and Navy. The aircraft is "dart like" in shape and design and will be stealthy. The aircraft is being designed so that a fleet of these can be used together to attack targets, during the first wave, to destroy communications and other high value targets. Boeing is hopeful that final assembly will be sometime in 2006 at Plant 42, with actual flight testing by 2007 at Edwards Air Force Base. |
| Antelope Valley News |
| Nov 14th- The City of Palmdale announces that they are putting on the finishing touches to the widening of Ave S, and that it should be completed by mid December, subject to any possible weather related delays. The widening includes two new bridges which pass over the railroad tracks. From the Fwy 14, the new Ave S will carry 4 lanes of traffic to 25th St East. Besides the two new bridges, the project includes: four new traffic lanes, turn pockets, medians, new traffic signals, curbs, gutters, sidewalks, drains, a bike path, bus stops, streetlights, and some landscaping. Bad weather and some delays with moving some utilities, have pushed back the completion about 6 months. The work began in Oct of 2003 and has cost $23M. |
| Nov 16th- At a Palmdale Chamber of Commerce meeting, Universal Health Services CEO, Robert Trautman, says that he is hopeful that construction on west Palmdale's new hospital will begin by Dec 1st. Trautman says that by Dec 1st, they will have their infrastructure improvements completed so that construction can begin. The 250 bed hospital complex should be completed by the summer of 2007. The adjoining 60,000 sq feet of medical office space should be ready for occupancy by the summer of 2006. As part of the arrangement with the City, UHS will also build 80 units of senior housing nearby. The new hospital will be located on Tierra Subida, at Ave Q-8, 1/2 mile south of Palmdale Blvd. |
| Nov 17th- Amid the last minute hustle and bustle, Wickes furniture store holds it's grand opening at their new west Palmdale site at the NE corner of 10th St West & Rancho Vista Blvd (Ave P). Located in the western portion of the old K-Mart site, it is Wickes first store in the Antelope Valley and totals 40,000 sq feet. Wickes takes a bit different approach to selling furniture, vs most of their competition. Wickes sells furniture in groupings, i.e., room by room. A consumer can walk through their store, look at how one living room (or bed room) is setup, and buy the whole grouping to ensure getting the same look. The consumer is not required to buy the whole "room" but they have that option to save time. Customers can switch pieces out of redesigned sets to fit their taste, with plenty of accessories available as well. The PalmdaleWickes store is the 33rd in the US and the 12th in the Los Angeles County area. On Nov 26th, three days after their grand opening, Wickes officials said that it was an overwhelming success, with many customers driving up from Santa Clarita and the San Fernando Valley, a distance of 40 to 50 miles, to view the store. Wickes store official, Luke Koupal said, "We had a tremendous day on Wednesday. We were trying to do some last minute things, to prep the store, but there were so many people outside, waiting, we just opened the doors and let'em in. We've had an incredible response! We didn't expect it. The community was overwhelming; accommodating, nice, friendly, and patient. I have opened 18 stores and this was one of the best." |
| Nov 17th- The City of Palmdale wins a $100,000 judgment vs an apartment owner that let his property get run down and become a public nuisance. During the litigation process, the property was taken away from it's owner and given to a court appointed special receiver, who then corrected code violations and evicted tenants that had criminal backgrounds. The court receiver then sold the property to a private party to recover costs. Besides the $100,000 penalty, the original owner has to pay the City's attorney's fees of $55,000. Said Palmdale City attorney, "This victory puts on notice all property owners who let their properties slide into disrepair, which impacts neighborhoods and the greater community, that Palmdale will not let you get away with it." The apartment owner, not only lost his property, but had to pay the City an additional $155,000 in fines and attorney fees. |
| Nov 20th- Microsoft
holds a public demonstration to unveil their new video game box, called
XBox 360 video. The demonstration and exhibit were held at a hangar
at US Air Force Plant 42 in Palmdale. The event, which was
advertised through an "underground internet media campaign",
drew 3,000 "gamers" from all 50 states and 25 different
countries from around the world. The Plant 42 hangar used was site
9, which was once used to build the B1 Bomber. The game box roll out,
called "Zero Hour" by Microsoft, began at sunset on a Sunday
evening, the 20th, and lasted 30 hours. Globally, the computer gaming
market is tagged at $$8 billion. Analysts say the MS roll out now puts it ahead of it's two primary rivals, Nintendo and Sony, in the computer gaming industry. |
| Dec 2nd- Although opposed by 150 +/- Ana Verde residents, Empire Land is moving ahead in their effort to get the NW and NE corners of Tierra Subida & Ave S rezoned to commercial use. Empire Land is one of prime movers and builders in the masterplanned community of Anaverde, located about 1 + miles west of this intersection. The opponents of the zone change are residents of homes on acreage, south of Ave S, up the hill. The residents say that having commercial in this area will blight the rural atmosphere. The present land use for these two corners is 1 house per acre, or A 1. If the zone changes are approved, the NW corner would be a 12 acre commercial center, while the NE corner would be a 13 acre commercial center. Opponents also site that the increased traffic flow and congestion would not be good for the area, as traffic bottlenecks would occur at this intersection. Empire Land will seek a General Plan amendment from the City of Palmdale in January. Eventually, the likely outcome will be approval. There will be changes and concessions, but in the end, this corner is going to become commercial. The need is evident, as hundreds of new homes are being added to an area that already has hundreds of homes and NO commercial land or services. And as the saying goes, "the other side has bigger hitters." |
| Dec 3rd- Palmdale Mayor Jim Ledford cuts the ribbon to officially open Oasis Park, east Palmdale's newest park at 40th St East & Ave S. The main building at the park is 16,800 sq feet and features a gymnasium with two regulation basketball courts, a multipurpose room, a kitchen, dance studio, and a youth game area. Also at the park area is Dry Town Water Park and Mining Company, which will open Memorial Day 2006. The next phase of the park will see a library added as well as a 4.5 acre area where a farmer's market and movie nights are planned. Palmdale property owners, at the ballot box in 2002, agreed to a $30M property tax assessment to fund the construction of these new parks and recreation centers on both the east and west sides of Palmdale. |
| National Housing Market- The following housing data is subject to large sampling and other statistical errors. Substantial revisions in this data are common. It can take up to 6 months to firmly establish a new trend in sales activity. |
| October housing starts (Commerce Dept), released November 17th, fell 5.6% to a seasonally adjusted 2.014M units. It was the weakest month for housing starts since March of this year. Although comparatively weak, housing starts have now been above 2M for 7 months in a row and in 12 of the last 15 months. Here is a regional breakdown: the west, -10.8%; mid-west, -10.5%; the northeast, -7.5%, and in the south, starts were down just - .5%. For all of 2004, total housing starts were 1.956M. The general tone of housing analysts is that the "best is over" and that these numbers fit in with the ongoing theme of a weakening housing sector. |
| October building permits, (considered a leading indicator and a signal of future activity) also released Nov 17th, also fell, -6.7%. |
| October existing home sales (Natl
Asso of Realtors), released November 28th, fell - 2.7%, to an annualized
rate of 7.09M. The decline was greater than anticipated.
Unsold inventory rose to 2.87M units, which is a 4.9 month supply
which is the highest level in nearly 20 years. Over the past year,
the median price of a resale home has risen 16.6%. All of this "signals
that the housing sector has passed it's peak", said one analyst,
while another said, "Make no mistake, slowing has occurred. We
expect further cooling in coming months." Existing home sales
fell in all four regions of the country, with the biggest decline
in the NE, at -7.4%. Oddly, hurricane Katrina actually improved homes
sales, as Baton Rouge (the upper Louisiana area), Mobile, Alabama,
and Houston, Texas, had huge sales gains. Apparently, thousands of
New Orleans residents will not be returning to live there. While this
report may sound ominous, I have been telling you for two months now,
that the hot part of the housing cycle is now behind us. The resale home market, while off of it's volume highs, is still very active and is still very healthy. Sanity is returning to the housing market, and that is a good thing. |
October new home sales (Commerce Dept.), released just one day after the above existing home sales report, came in very strong at + 13% to a record 1.42M annual rate. This number is a new record and the largest monthly gain since April of 1993. The previous record was in July at 1.37M. The gain was larger than expected and indicates that the new home market still has plenty of life left in it. October's sales were also 9% higher than in Oct of 2004. In Oct there were a record 496,000 new homes on the market, which at Oct's torrid sales pace, represents a 4.3 month supply. The median price of a new home is now $231,300, which is up less than one percent vs one year ago. What is not revealed by these strong numbers, is how many new homes were sold due to builder incentives, freebies to entice sales to soften the blow of higher interest rates. Existing resale homes cannot compete with the emotional appeal of buying a new home. Also this month...on November 8th, Toll Brothers, a national home builder, but not one in the AV, announced that in 2006, they were lowering new home deliveries by about 8%. Toll Brothers cut new home deliveries from the 10,000 level to about the 9,200 area. Rising interest rates which is softening demand in many of their markets, was the reason given. Toll also complained of an increasingly complex regulatory environment which has 25% of their new projects backlogged at least 12 months, and thus, cannot be offered for sale. Even though TB cut back their 2006 home deliveries, their 2006 number is still projected higher than the number of homes they will deliver this year, in 2005. Hardly a reason to declare the end of the housing market. |
| AV Home Market News |
| Anecdotal remarks
by various residential Realtors in the AV reveal that the resale housing
market, while still healthy, is in the process of returning to reality.
Home prices and sales are leveling off. Inventory of available resale
homes has increased to the 1200 area, with homes now taking up to
60 days to sell. In the spring, homes were selling within 20 days.
While one cannot call it a "buyers" market yet, a lot of
the momentum has shifted away from sellers. Home prices are stable,
with most Realtors saying they do not expect to see major price declines.
For the most part, the practice of pricing homes against what else
is on the market vs pricing according to actually home sales, is disappearing.
The "white hot" portion of the housing cycle is now behind
us, as mortgage rates are now at or above the 6% level. The AV housing
market is still very good, still sound, but one could say that the
"froth has been removed from the market". Realtors across
the board are actually a bit relieved, as they can now slow down in
searching for property, not having the urgency of being pushed into
transactions by an over-heated market. This allows home buyers to
be more thoughtful about their purchase as well. |
| Building permits- During the first ten months of 2005 vs the same period in 2004, building permits, valley wide, are up 49.9%, with total valuations of those permits also up, some 46.6%. For Palmdale, permits for single family homes were up 33.8%, while in Lancaster, single family home permits were up 68.1%. Multi- family permits, which were decent in 2004, have dropped off the map, as Palmdale has none so far in 2005, while Lancaster has only 6, vs their 218 (Lancaster) last year. Palmdale had none in 2004 as well. Part of the reason for the drop off is a lack of viable land with the proper zoning. Much of Palmdale's vacant land for multi-family is located in undesirable neighborhoods, while in Lancaster, much of it is in vacant areas, without any other development or services. Larger projects have met with stiff resistance in the past, if located near single family homes. |
| The housing bubble is the creation of the media, so says Scott Voltz, president of his own commercial real estate firm in the Valencia, Ca. area. Voltz spoke to the AV Board of Trade on November 29th, saying, "There is no such thing as a bubble. The so called bubble is a media creation." Voltz said, that in general, real estate in the AV has doubled since 2002. Voltz compared AV real estate appreciation with the rate of appreciation of other investments during the same time period, citing that Google (the stock) has gone up 417% in 14 months, gold has gone up 160%, crude oil has doubled, and the stocks of homebuilders Toll Brothers and KB Homes are up some 500%. "Real estate is cyclical and that cycle is driven by supply and demand," Voltz said. Continuing, Voltz said, "That the factors contribute to the cycle and fluctuations in the market include: population growth, job stability and growth, affordability, the buyer's view of the future of the area they are considering, and monetary factors- meaning interest rates. The home market in the AV is almost a "perfect storm", with low interest rates, easy credit, and a surprisingly strong economy. The same is true of the commercial and industrial markets. All facets of the market are doing well." While Voltz also said that he sees nothing in the foreseeable future that could cause a weak market, as in the 1990's, he did say that if the FED over tightens, that could put the US economy into a recession. |
| On November 30th, Rosamond Community Services District proposed raising water connection fees to the tune of about $5,500 per new home, an increase of 268%. The fee is paid by home builders at the time of construction, then passed on to the new home buyer. At the public hearing on this subject, several major home builders in the Rosamond market showed up to express their disagreement with the size of the increase. The builders did agree that fee increases are needed and that they are part of the business of home building. BUT, that a 268% increase in the fee was too steep and too fast. The water district argued that Rosamond was growing fast and needed the extra fees to expand the system to meet that growth. Rosamond's population right now is about 17,000. Projections have the Rosamond area growing rapidly over the coming years. Critics of the population projections say that growth, while it is ongoing, will be more of a trickle than a sudden boom. The final decision on the fee increase for postponed until the Dec 20th meeting so that more number crunching and research could be done. |
| AV New Home Sales Data (source: The New Housing Monitor, a Hanley Report) |
As of November 20, 2005 -New Homes sold year to date - 4,301 |
Home builders
in the AV (alphabetical order)
|
| Land Market |
Supply closed out November at
2,260, up 4.7% vs last month (October). The trend of rising
supply, or inventory, can now clearly be called a "trend".
Any comparison you want to make shows supply rising. Since June,
supply is up + 24.6%. Year to date, supply is up + 18.8%. November
2005 vs November 2004, supply is up + 10.5%. The time it takes to
sell all existing land listings made it's bottom in May, at 5.6
months. Weakening sales and rising supply have pushed that number
up to over 9 months, which is a + 50% increase over the past five
months. Even though overall supply may be up, in certain areas of
our land market, supply is tight. One example of this would be west
side custom home sites. Supply in this category has been very tight,
Supply numbers in perspective: |
| Why is the supply number important? The market value of all things, eventually, comes down to the basic principle of supply and demand. The supply number helps to tell us the psychological condition of buyers and sellers, by it's change and it's rate of change. Large drops in supply could be signaling speculative behavior as investors fight it out to get into our market. If supply were to increase rapidly, that could be telling us that buyer's are backing off, and/or, that numerous new seller's are coming into the market. In combining this data with the demand number below, we can assess the current status of the land market. When supply numbers approach historical highs and lows, they can also be useful in signaling major turning points. Example: at the peak of the 1988-90 market, supply made a low in May of 1989 at 587. In hindsight, May 1989 was at or near the point of peak speculation in our market, as demand over-whelmed supply, drawing it down. The value in following supply, is not in the number itself, or what any one number might mean. The value comes from when it changes, how much it changes, and magnitude of that change. |
| Demand in November (248), was down
from October (274), - 9.4%. November was the third straight
month of declining sales volume. Declining sales volume, until proven
different, is now a trend. Since June, monthly land sales volume has
decreased - 18%. Year over year comparisons have not yet turned negative
as Nov 05 is + 44% better than Nov 04. Also on the positive side,
the last 5 months of this year, July through November, look very similar
to the same period in 2004. During this time frame in 2004, land sales
fell - 16.5%, while this year they have fallen just a bit more, at
- 18.1%. Is this typical Q 4 weakness, or is something else developing?
Time will give us the answer. If last year's similarity is going to
continue, December 05 will have to show us improved land sales as
it did last year when December 04 gave us 213 sales vs November 04's
172. Any improvement in December, vs the past two months, would be
positive. Last December (2004), land sales bounced back to their mid-
2004 numbers. What could cause this? It could be investors coming
back into the market to get positioned for the new year. Even if land
sales were to fall to the 200 per month level, this would NOT be catastrophic.
That would only represent, in round numbers, a volume pull back of
33% from their mid 2005 volume high's. Land sales of 200 per month
is still an active and healthy market. In year 2000, we struggled
to get just 25 land sales per month, so let us keep things in perspective. Demand numbers in perspective: Land sales year to date- 3,092 Nov 2005 vs Nov 2004- + 44 % Land sales projected for all of 2005- 3,342 Land sales in all of 2004- 2,372 Land sales in all of 2003- 1,240 Land sales in all of 2002- 679 Land sales in all of 2001- 407 Land sales in all of 2000- 307 --------------------------------------------- Average land sales (in 2005) per month- 281 Average land sales (in 2004) per month- 198 Average land sales (in 2003) per month- 103 Average land sales (in 2002) per month- 56 Average land sales (in 2001) per month- 34 Average land sales (in 2000) per month- 26 |
| The Beginning: Land sales volume began to increase dramatically in April of 2002. For this reason, I am calling April 2002 the beginning of this bull market in AV land. This means that the bull market in AV land, is now 44 months old (3 years and 8 months). |
| Supply & Demand Summary: We now have a trend of rising supply and falling sales volume. The technical rule of thumb, is that volume changes precede price changes. In 2002 and beyond, as volume increased, eventually, prices rose also. I would expect, that in some areas of our valley, where supply is greater than demand, eventually, we will see prices declines. Momentum in this market is moving away from sellers, toward buyers. If this continues, it will be a very slow and deliberate process. However, this is still a seller's market. The change in momentum means that in all probabilities, the "red hot" portion of the cycle is behind us, and more rational and thoughtful buying by investors and developers is in the cards. The "frothy" part of the cycle is behind us, but the market is still healthy and active. The changes we are seeing in supply and volume are a normal part of the cycle and were bound to happen. Although I cannot say with any certainty at this point in time, the possibility of renewed strength cannot be ruled out as we head into the new year. The new year could bring stabilization of interest rates, which could re-stimulate the new home and existing home markets. As I said last month, each individual investor should consider their risk tolerance/holding period before putting new money into this market. The Antelope Valley has a great future. This was true in 1970, 1980, 1990, 2000, and it is still true today. Anyone who purchased carefully selected acreage in any of these years, has made very good money. |
| -
Frank Donato, December 2005 |
| Information
presented above has been compiled from reputable sources, and is
deemed reliable but not guaranteed. All opinions expressed are those
of the Author. |