Increased Land Values Leads Builder to Sell Instead of Build

In another sign that homebuilding may be picking up in Southern California, an Irvine-based developer/homebuilder announced this week that it has sold 11 acres in the Orange County community of Lake Forest .

Trumark Homes said it sold the property, acquired just 20 months ago, because of the “dramatic increase in the value of land across coastal Southern California.”

The company had planned to start the construction of 68 to 72 single-family detached homes on the property in late 2010, but changed its mind after receiving several unsolicited inquiries about the purchase of the undeveloped land — known as “paper lots” — over the past few months.

Said Michael Maples, the company’s president and CEO:

The property is now worth three times what we paid for it in August 2009 and it simply made more sense to sell it than to build it out. Once we officially took it to market, we got 20 offers from both public and private homebuilders at an extremely attractive price point.

The former Whisler Family Trust property, located on the corner of Regency Lane and Osterman Road in Lake Forest, was sold to a public builder at an undisclosed price.

Maples attributes the sharp increase in land values to increased optimism about the housing market in core areas of Southern California, as well as the recent surge of new home sales on the north end of the Irvine Ranch. Homebuilders are eager to get back to work, he said, and coastal markets are rebounding faster than those in the Inland Empire.