River Islands at Lathrop sold 58 homes in February

That is a 45 percent increase over the 40 homes sold in January.

It is a 16 percent increase over the number of average monthly sales in 2022.

Given River Islands was selling 50 homes in a typical month last year, CEO Susan Dell’Osso noted that the 58 sales in February represents a heathy market.

And it is much healthier in Lathrop than the national new home market.

Dell’Osso said the stormy March weather could have an impact on final sales for this month given the storms have hit with regularity on weekends that are prime days for home sales.

River Islands is a planned community that has been approved to ultimately build 15,001 homes.

Data compiled by the federal Department of Housing and Urban Development indicated they were 640,000 new homes sold nationally last month. That reflected a 1.1 percent increase over January sales levels.

The median sales price was $438,000 nationally, some $200,00 below the median sales price at River islands.

River Islands — and other new home builders in the South County — are still benefitting from a trend that started in the pandemic — the hybrid workplace.

That means a job that allows employees to work from home several days a week not only reduces commute time and expenses but allows workers to enjoy the lifestyle that moving out of the Bay Area can afford their families.

The strong sales underscore the belief by many new home builders that the price drop in 2022 was more of a market correction than a sign of a slowing market.

Average new home prices rose 25 percent during the pandemic due in part to supply chain issues.

Two other factors are also helping home sales bounce back.

*Jumbo loans — for what is believed the to be the first time ever — has had fixed rates that are lower than 30-year conventional mortgages.

*Buyers are going into deals with their eyes wide open.
While it helps that loans for homes exceeding the FHA threshold of $726,200 have had rates roughly one percent below a conventional 30-year loan in recent months, buyers who are now in the market for a new home are doing so more with a firm grasp of what it involves. That has resulted in a plunge in the number of people cancelling contacts after three months.

Unlike in 2008, buyers today are putting 20 percent down, have employment that qualifies them for mortgages that they secure, and view home ownership in the long range and what it does to stabilize their household rather than flipping it for a big gain and moving on.

What is happening in River Islands is reflected in the overall South County new home market as well.

 To contact Dennis Wyatt, email dwyatt@mantecabulletin.com