Opinions on Newhall Ranch development effect on home values?

Question

Apparently this is getting approved and moving forward and there will be 5500 new homes built right by Magic Mountain and 21,500 total units including business space, retail, elementary school, fire station etc

http://www.dailynews.com/government-and-politics/2...

I just bought a condo last year in an expensive market that is about a mile away from where this will be and trying to get a feel about whether or no I should be concerned about value of my place?  My condo is work about $30k more then I paid last year but will $350-400k condos correct to $200k with influx of new construction?  Will all of the $800k houses in my neighborhood be selling for $400k in a few years?  I know that nobody can predict the future or markets but seems like that many new homes at once could greatly effect the market values.  But on the other side I know that if it leads to more businesses there and more jobs then the area could potentially boom too.

Brian Ploszay · Answer

The housing shortage is acute in Southern California.   So addition to the housing stock is welcome.  I do not think that this will negatively impact your home value immediately.   This development  will bring more outside people to Valencia.  Certainly local businesses will be happy.   By the way, I am a fierce critic of Southern California's inability to add density housing.  The result has been an artificial constraint in building the supply of housing that is needed.  And the prices are outrageous.

Kevin Lefeuvre · Answer

Sounds more like a good news for you, IMO. Unless you have information that the housing is in the low end range. I see only 10% affordable housing according to the article. Not much to worry about.

Development always increases businesses, jobs, leading to higher values, unless you are filling in the area with a different demography than the existing one which does not seem to be the case here.

Ryan Sommer · Answer

I was reading a new article on the development yesterday.  They are predicting a 15-20 year build out.  I expect to move in 5-10 years and not sure if I will sell at that point or keep as a rental but there should be plenty of time to let things play out.

I did see artist renderings of what basically looks like the Americana in Glendale with a huge outdoor retail/living spaces and I have to admit that would be nice to have down the street.  I actually lived in Glendale previously and building the Americana and adding luxury apartments there and several new luxury apartment/condos that have gone up on Brand in the past few years have not hurt the existing home values there at all and in fact they forced me out of my rental because rent went up over 50% in 2 years

Billy D. · Answer

I lived in the Santa Clarita Valley for 17 years, and while nobody can predict accurately what home values will do over time, I'd say that you have a decent chance of being fine over the long haul even with this next phase of the Newhall Ranch project.  Of course, "being fine," depends on your intended window for reaping the benefits of your investment and where we are in the Cycle at the time.

That said, there is plenty of demand in the SCV (good public schools, low crime, small-town feel), but our $/sq ft multiples still tend to be a bit lower than those of our neighbors just to the south in the San Fernando Valley.  Significantly lower than other areas of LA.

Ryan Sommer · Answer

Thanks.  Yeah the more I read about it and how phased out it will be it sounds positive.  It sounds like the amount of new homes being brought on the market will still be severely outpaced by predicted Los Angeles population growth over that time.  And as you said an influx of 60K permanent jobs in the area that they are predicting and additional shopping and restaurants will make the area more desirable.  That area is the best location in SCV for commuting to LA because of easy access to the 5 but shopping/dining options aren't great there so adding more options right there instead of having to drive 15-20 minutes into Valencia shopping area would be nice

Nabil Suleiman · Answer

supply and demand comes to my mind first

The driving of big prices around LA is definitely based on that concept so I imagine it would effect Santa Clarita quite a bit.

But I'm also interested to see what happens

Opinions on Newhall Ranch development effect on home values?

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