New Home Company Ramps Up Again in Sacramento

After a deliberate slowdown for reasons both internal and external, The New Home
Company Inc. is scaling up projects again in the Sacramento region.

The company will open new homes across three different projects this summer, from El
Dorado Hills to Roseville.

“Everybody saw the slowdown in late summer, early fall of last year,” said Kevin Carson,
the company’s Northern California president, after interest rate hikes cooled buyer
demand. “This year, it improved almost immediately.”

Ridgeview in El Dorado Hills, a 44-home project on lots of up to 19,000 square feet, will
be New Home Company’s first this year locally, Carson said. That project has seven floor
plans, up to 4,633 square feet and five bedrooms.

In about a month, the company will open Valley Oak in Roseville within the Campus
Oaks infill development. Valley Oak will have 121 homes in two neighborhoods, as large
as 4,410 square feet and with six bedrooms.

New Home Company’s final 2023 project release in the region will be the 122-home
Long Meadow community in Elk Grove, with homes up to 2,776 square feet and four
bedrooms.

Carson said Irvine-based New Home is also working to acquire more land in the region
for 900 future homes, beginning next year. One of those appears to be 525 homes in Elk
Grove’s Arbor Ranch development. Homes in that project will be up to 3,600 square
feet, and first available in late 2024.

First the Covid-19 pandemic, which caused a surge of buyer interest, then the interest
rate hikes caused whiplash among many homebuilders in the last three years. A rebound
in buyer interest, partly driven by a lack of resale inventory, made them change plans
again this year, Carson said.

For New Home Company, those factors came in addition to the company’s acquisition
by Apollo Global Management Inc. (NYSE: APO) in fall 2021. Since its founding in 2010,
New Home Company has gone from private builder, to public, and now back to private
again, another reason for the company to reorient its strategy.

In its current push, Carson said, he expects to see more company activity in the
Sacramento region and less in the Bay Area. As well, though the company has always
offered custom options to create a home office, demand for that may have lessened since
the pandemic, he added.

Another market shift is where Sacramento buyers come from, he said. After accounting
for as much as 40% of the buying base in 2020 and ’21, he said, Bay Area transplants are
now about 10% to 15% of the Sacramento market.

“It gets down to what it’s always gone down to, location,” he said of the biggest drivers
for buyers now. Properties in popular cities, with access to neighborhood amenities and
nearby schools and shopping, will command a premium.

Between the three projects debuting this summer, he said, pricing will range from more
than $1 million in El Dorado Hills to around $500,000 in Elk Grove.

By Ben van der Meer – Senior Reporter, Sacramento Business Journal