By Nils Wright – Correspondent
Jun 29, 2003, 9:00pm PDT Updated Jun 26, 2003, 9:00am
Sacramento's newest bedroom community, in southern Yuba County, could be sprouting rooftops by the end of the year.
Not much more than a 20-mile jaunt north from Sacramento, the area is being eyed by homebuilders as the next hot spot.
Builders, no longer able to find land at reasonable prices in Sacramento County, are lining up the by dozens to build homes in Plumas Lake, the area that's eventually slated for as many as 12,000 homes under Yuba County's plans.
Homebuilders are eager to tap their picks into land to make homes starting in the high-$100,000s, the price for coveted first-time homebuyers.
The first dwellings have yet to be built, but construction giant Beazer Homes could have its first homes up by the end of the year. Other homebuilders anticipate raising their first homes sometime in 2004 or 2005.
'Ramping up for tremendous growth': As homes have grown like wild poppies in suburbs to the south and east of Sacramento, the value of the rest of the land has risen so much that it's become cost-prohibitive to build homes for entry-level homebuyers.
Greater Sacramento's woes augur well for Yuba County, which could see more growth due to its lower land prices and proximity to Sacramento -- not much farther from downtown than Roseville and Elk Grove. Homebuilders say that they'll probably construct more homes in the area once Plumas Lake is all built out.
"They're ramping up for tremendous growth right now," said Jeff Fautt, division president of KB Home North Bay, which also encompasses the northern Sacramento Valley.
Yuba County anticipates that 12,000 homes could eventually spring from the 5,263-acre site of a former lake bed.
For the most part, since the lake ran dry sometime in the late 1800s, it's been used as rice fields and grazing land and for growing orchards.
Plumas Lake is 27 miles north of downtown Sacramento, west of Highway 70. The land is owned by more than two dozen investors and the county wants the 2,000-acre southern half built out first, according to its Plumas Lake specific plan.
Anticipating the Sacramento region's continued expansion, Yuba county was hoping to see homes there 10 years ago.
"When the county was processing the specific plan in the early '90s it anticipated a 10-year build-out scenario," said Pete Calarco, assistant director of Yuba County's planning office. "But then the regional housing market dropped off in the early to mid-1990s."
Plumas Lake had to wait some more even after the market recovered and builders found North Natomas, Elk Grove and Roseville instead.
Dave Jarrette, a veteran market observer and partner in the Roseville appraisal firm of Giannelli, Jarrette & Waters, said that southern Yuba County is the next big growth area in the region due to its affordability.
"There's a major shortage of residential lots in the area and there are not too many places to go that are in a reasonable commute of Sacramento," Jarrette said. "The whole Natomas basin (north of Sacramento) is all spoken for and land lots in Plumas Lake are much less expensive than those in south Placer and Natomas."
Sacramento lot prices have quadrupled to an average of about $100,000 a lot from just three years ago.
This has made it virtually impossible to reach the $200,000-level homebuyer with new homes. Those homes in Sacramento represented 1.2 percent of the homes sold in the four-county Sacramento region last year, compared with 31.6 percent in 2000, said Greg Paquin, head of The Gregory Group.
The average price of a new home rose 46 percent from 1999's figure of $245,000, reports The Gregory Group.
Finished lots in south Yuba County are going for about $50,000, half of what they would in Sacramento.
"Land prices and home prices keep increasing and the supply continues to dwindle," said Chris Apastolopoulos, vice president of land acquisition for KB Home North Bay. "A lot of buyers have been priced out of the market and Plumas Lake is an ideal location because it will allow us to offer a good house for a low price."
The shape of Yuba's future: Jarrette foresees Highway 70 eventually expanding to four lanes as Plumas Lake grows. He also said that a connector between Highway 70 and Highway 65 near Lincoln will also have to be built. Right now the commute to downtown Sacramento would be similar to the one from Elk Grove.
To accommodate the new arrivals to southern Yuba County, the Plumas School District is planning to build as many as four new elementary schools in Plumas Lake. One builder, Elliott Homes Inc., plans to build a school in the subdivision it's planning, Calarco said.
The area also has hundreds of acres slated for light-industrial and retail development. Calarco said that while no retailers have signed up, some have contacted the county asking questions. He would not be more specific.
Jarrette said that retailers usually only get interested when they start seeing rooftops.
Yuba County's Plumas Lake is a comprehensive and well-planned development, said Gerry Kamilos, the Sacramento land planner and developer working as a developer for a large landowner in Plumas Lake.
Thirty subdivisions: The first project in the Plumas Lake area has been dubbed Rio del Oro. It has 1,581 lots, of which Beazer Homes owns 643. Last week its model homes were approved by the county's design review committee, which consists of Planning Commission members.
Beazer's homes in that project could be up by September, said Calarco.
That jibes with what the regional president of Beazer told the Business Journal in March. Anthony Tonso, who did not return phone calls, leads Beazer's push into Plumas Lake.
As soon as the model homes are built, Beazer plans to put some salespeople in a trailer on the site to start selling future houses.
Atlanta-based Beazer last year sold 1,182 homes in the Sacramento region. Earlier this year it agreed to buy 643 finished lots with plans to buy an additional 900. It's believed that Beazer paid about $30 million for the 643 lots, for an average price of about $46,656.
Beazer estimates it will sell homes as low as $170,000, with the average price in the low $200,000s.
KB Home North Bay, another specialist in entry-level homes, owns 1,835 lots in Plumas Lake, which the company plans to start building next spring. KB's Fautt said the company anticipates completing the first homes in late 2004 or early 2005 -- depending on weather conditions.
KB plans to price its homes starting in the high $100,000s and moving up from there, Fautt said. The company plans to sell homes on three different lot sizes -- 5,000, 6,000 and 7,000 square feet.
The smallest homes will be about 1,200 square feet.
Myers Homes plans to build 599 homes and hopes to have the first ones up after the start of 2004, said Steve Tofft, general manager. He said the company plans to price its homes from about $220,000 to $265,000.
Myers Homes plans to offer three lot plans, 6,000, 8,000 and 9,200 square feet.
Tofft said he's not sure how fast all of Myers' planned homes will be built out.
"It depends probably on how fast I want to build them," he said. "We try to be smart about it. We think it's going to be a strong area but we'll build as the market (dictates)."
The list of builders in Plumas Lake keeps growing. It also includes Elliott Homes, Regis Homes, and others.
Axel Karlshoej, a Plumas Lake landowner, earlier this year sold 643 lots to Beazer but he has another 923 for sale in Plumas Lake's second and third phases, said Kamilos, who is working as Karlshoej's developer.
Kamilos said that he's completed all of the grading operations and is starting to install underground utilities. He expects to deliver the first lots to Beazer by the fall but he said Beazer will start construction by the end of August.
With so many developers building homes in the area, the builders are partnering with each other to ensure that infrastructure for the area is cohesive, a difficult task considering the developers have competing interests.
"But these groups need to put those feelings aside and focus on the greater cause of the project to get the project implemented," Kamilos said. "It requires sitting down and identifying all the required facilities and developing a plan and financing mechanism to pay for the infrastructure."