Pricey Loomis homes again attracting Bay Area buyers

Posted by on Apr 12, 2013 in News | 0 comments

Source: Sacramento Bee

By Hudson Sangree and Phillip Reese
Published: Sunday, Sep. 2, 2012 – 12:00 am | Page 1D

With its million-dollar homes surrounded by vineyards, the Sierra de Montserrat subdivision in the foothills of Placer County looks a lot like the Napa Valley landscape it’s trying to emulate.

Developers of the Loomis neighborhood are aiming to attract high-end buyers, including transplants from the Bay Area, looking for a luxurious wine country lifestyle at a fraction of the cost of Napa or Sonoma.

The custom homes on 5-acre lots at Sierra de Montserrat cost about $1 million to $1.4 million. Buyers from the Bay Area could expect to pay between $3 million and $5 million for similar homes in the Napa Valley, said developer Don Murphy, with home builder Kinetic Partners. “For them, this is a value play,” Murphy said while showing off a striking home designed by architects Pedro Lugo of Loomis and John Packowski of Sacramento. The design included elements of rustic Tuscan farmhouses and midcentury modern American homes.

Sierra de Montserrat is part of a swath of southern Placer, including the upscale enclaves of Granite Bay and Loomis, that pulls in buyers from wealthy coastal areas seeking space, ease of exurban living and amenities that a million dollars can’t buy there, but can easily buy here.

Last decade’s housing boom saw a big influx of buyers to the Sacramento region from the much more expensive Bay Area – about 80 per day or 150,000 total from 2001 to 2005 – and a fast run-up in home prices that led to a disastrous housing bubble. Many of those buyers, about 40,000, came from Silicon Valley.

In the last five years, the housing market and economy collapsed across California. But now some job centers and real estate markets are beginning to heat up, especially Silicon Valley, and coastal buyers are again seeking lifestyle properties near Sacramento, where housing affordability – combining rock-bottom home prices and ultra-low interest rates – is near an all-time high.

Today, home prices in the Sacramento area average about 20 cents on the dollar compared with Bay Area housing. That’s the largest price spread in decades and even greater than the price differences that helped ignite the last housing boom.

Sierra de Montserrat’s developers are hoping to benefit from that difference.

The subdivision was started by Westwood Homes in the mid-2000s. The local company still owns a handful of lots there.

But most of the lots in the partly built subdivision were repossessed, then purchased by its current majority owner AGK, which consists of Murphy’s Kinetic Homes and investment firm Angelo, Gordon & Co., headquartered in New York.

They opened for business this summer and plan to restart sales soon.

The subdivision has 62 lots on 320 acres, including 200 acres of nature preserve and 40 acres of working vineyards. The 16 varieties of grapes are sold to winemakers. A nonprofit group manages the habitat of oak and wetlands, with its turkey, deer and coyotes. Homeowners have a 5-acre parcel but are responsible for maintaining only the area immediately around their house.

A small number of homes were completed earlier, with one still under construction in a Spanish mission style, complete with bell tower.

Though the newest round of sales has yet to commence, there is already a “surprisingly deep” list of interested buyers, Murphy said.

They include Silicon Valley professionals who work from home, well-heeled empty nesters seeking to be close to family in the Sacramento area, and younger couples that own Bay Area homes worth much more than comparable Sacramento real estate.

The 5-acre lots in Sierra de Montserrat are selling for about $350,000 to $400,000 – less than half of the $800,000 or more they cost in 2007, Murphy said. Construction costs are also much lower than during the boom years, he said.

Among the would-be buyers are Carrie Porter, an interior designer, and her husband, David Porter, a retired auto industry executive, who are selling their Central Coast home and planning to move to Sierra de Montserrat to be closer to their daughter and her family, who live in Roseville.

The increasing sophistication of the Sacramento region’s housing, dining and shopping options makes the move more palatable, she said. So does the prospect of no longer having to drive for nearly six hours to see her children and grandchildren.

“We really like it here,” Carrie Porter said of her hilltop ocean-view home in Arroyo Grande. “We have a dune buggy, and we go to the beach. There’s always something to do here, but there isn’t family.”

Housing industry consultant Greg Paquin of Folsom said the Porters fit the profile of retirees and empty nesters who move from coastal areas and buy high-end homes in the Sacramento suburbs to be closer to family.

Since many young families can’t afford the coastal areas where their parents live, the parents move here, he said. The trend is starting to pick up again, after a hiatus during the housing crash, Paquin said.

“They’re moving out here because their kids are here and they’re nearing retirement or retired,” he said. “For a million dollars out here you get a lot of house.”

Lately, the buying activity by wealthy coastal transplants in the four-county Sacramento region has been more a trickle than a flood. About 70 homes in the four-county area have sold for more than $1 million in the last six months, according to a Bee review of property records.

Besides the Tahoe area, Granite Bay is the most popular spot in the region for million-dollar sales. Only a small number of the 15 or so million-dollar homes sold in Granite Bay went to Bay Area transplants. Many more went to local doctors and business executives.

Yet it’s easy to see why local developers want Bay Area and other coastal residents to come here. Santa Clara County alone has more than triple the number of million-dollar earners as the entire Sacramento region, according to the latest state tax data.

As a group, the newcomers who arrived in the five years ending with 2005 came with ample funds – a combined annual income of $4 billion.

Even a slight increase in Bay Area transplants buying at the top end of the Sacramento-region market could be a sign of a resurgent Bay Area market that will eventually influence Sacramento home prices in a more widespread way, experts said.

“It’s a good sign if the numbers are greater than they have been in the last four to five years,” Paquin said. “It does foreshadow or let us know that that segment’s going to be coming back.”

Eve Fenstermaker, a veteran real estate agent in Granite Bay, said she has seen a steady influx of coastal transplants to one of the region’s wealthiest areas.

“When the Bay Area starts going, it starts trickling up here because they start realizing what they can buy,” Fenstermaker said.

The agent said she has a client who sold her house in pricey Los Altos and wants to move to Placer County to be near her children. Other buyers include retirees who bought in another affluent vineyard community in Loomis called Clos du Lac, and a couple from Burlingame looking to live in Loomis for the schools.

“There’s not traffic. There are great restaurants. They want to get out of the city,” she said. “They’re moving for a lifestyle.”

Fenstermaker said she moved to Granite Bay from Alameda in the East Bay nearly 20 years ago for similar reasons, including for her three children to go to the local schools.

“It offered hope,” she said, “a sense of community and not an overwhelming population.”

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