Monday, July 20, 2015

The Reality of Pent Up Demand

What if you threw a party and everyone shows up. On Saturday (July 18th) I was shocked. To be honest it was more than a shock, it was a total smack upside the head. For those who have doubted the reality of the marketplace and the demands that high prices and low production have on housing, only had to be with me at the Trilogy Vineyards community in Brentwood, California. What happened Saturday was more than just an open house, it was a full-fledged storming of the castle and taking siege.

Trilogy at the Vineyards (GO HERE) is a resort type active adult master planned development about forty miles east of San Francisco. It sits near the Sacramento River (five miles north), within the eastern hills below Mt. Diablo, and is about an hour and a half from Sacramento, and an hour from Stockton. My land planning and landscape architecture firm has been working with Shea Homes (parent of the Trilogy brand) for more than ten years on the project. The community’s market is about fifteen million people that stretches from Santa Clara County to Sacramento County (and in reality, much farther). The community has a first class clubhouse and recreation facility, great tracts of vineyards that roll right up to the back doors of the homes as well as extensive olive groves – one could believe they are in Tuscany.

The Opening
For the last three months Trilogy Vineyards (Go HERE) has been marketing their new models (at least five new plans designed around the active adult market)—single story with a master down, high-end fixtures and appliances, well decorated, and considering the Bay Area market – very reasonable ($650,000 to $900,000). Extensive on-air radio time was purchased and even Masterpiece Theater on Sunday evenings was not missed.

I don’t have the final numbers but by the time I arrived at 12:15 Saturday more than 1500 people had arrived (or more) and my guess is that more than 4,000 prospective buyers or interested parties walked through the complex that afternoon. It was also an event that showed off Brentwood, the medical clinics and emergency services, restaurants, local cultural, to dispel the rumors about living out in the far reaches of the Bay Area. A first class job all around.

The active adult (over 55 but really over 65) is a rich market both literally and figuratively. We/they are all in the same boat: How do I get the equity out of my home and still remain in the region and not be required to live in some dumpy little 1,200 s.f. apartment with a bunch of whiney thirty-somethings living next door. We/they deserve better and this is the type of project that may appeal to us/them. The turnout seemed to prove this. While the conversion rate may be low, the exposure is unbelievable.

The active adult residential market that is in dire need of expansion and growth. The impact of the these types of projects roll through the residential marketplace, these projects usually free up housing stock that is closer to jobs and urban centers. This market—the baby boomer—has longs legs and will be growing for the next ten to fifteen years. It’s time that more builders get on board.

Stay Tuned . . . . . . . . . . .

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