A master developer is turning over home lots to five builders for the first phase of a massive Southern California project, another example of efforts underway to address the nation's housing shortage.
Lennar, K. Hovnanian, Watt Capital Developers, Woodside Homes and Richmond American Homes plan to build the first 650 single-family houses in Silverwood near the San Bernardino Mountains in Hesperia, California, according to John Ohanian, general manager of the development.
The homes will be priced from the mid-$400,000s to the $700,000s, with the first residents expected to move in by the middle of 2025, he said in an interview.
The ultimate plan for Silverwood calls for the 9,366-acre development to contain 15,663 single-family houses, townhouses and condominiums. The Inland Empire project will take 15 to 20 years to complete, according to Ohanian, who oversees Silverwood for the master developer, a joint venture of DMB Development, Schlegel Land Co. and Beaumont Partners.
"There is virtually no available new home product in this price range in Southern California," Ohanian said. "There is a significant undersupply of housing. There's close to 2 million units the state needs just to fill existing demand."
A lack of rooftops also is a major problem across the country, particularly starter homes, industry analysts say.
Home lot prices and construction costs have increased to the point where companies can't build relatively inexpensive starter homes, leaving a void for new families and young professionals.
What's more, there was so little demand for homes of any kind during the Great Recession of 2007 to 2009 that land developers drastically cut back on lot preparations, according to Brad Hunter, head of Hunter Housing Economics in West Palm Beach, Florida.
Existing homes limited
"It takes a long time to restart the production of lots once you shut down that machine," Hunter said in an interview.
The supply of existing homes for sale has increased recently, but inventory for buyers has been limited in recent years, in part because homeowners are reluctant to part with historically low mortgage rates obtained during the pandemic and reluctant to sell.
From the Homes.com blog: The 19 Most Popular Types of Homes and House Styles
The Silverwood development, in the Mohave River Valley, is about 20 miles from major employment centers in San Bernardino and nearly 65 miles from Los Angeles. A planned high-speed rail eventually could make a commute to Los Angeles viable for Silverwood residents, according to Ohanian.
An entity tied to Schlegel, part of the Silverwood master development team, bought the site in 2012 out of bankruptcy and assembled the joint venture to serve as master developer, according to Ohanian. It took a decade to address environmental litigation and gain government approvals and permits. The joint venture broke ground in 2022, preparing the land for homebuilders.
Aside from the homes, Silverwood, at an elevation of about 3,200 feet, also plans to include schools and up to 1.5 million square feet of commercial uses. Apartments also are planned, Ohanian said.
It's possible that a few more builders will be added to the mix, but Ohanian said the master developer hopes the five announced companies will build most of the 15,000 homes in the development.
He said interest in Silverwood has far exceeded the joint venture's expectations, with about 1,800 people on a list asking for information about the project.