Workers apply stucco on houses being built by Harris Homes in Palmdale.… (Anne Cusack, Los Angeles…)
In the brutal cycles of California real estate, the Antelope Valley has been among the last to boom, the first to bust and the slowest to recover.
But in the High Desert, separated from downtown Los Angeles by 65 miles and a mountain range, the housing market is finally gaining steam after the latest debacle, underscoring the strong recovery across the region.
The reason is simple: Big new houses are selling in the $200,000 range, a mere fraction of home prices across much of the region. And that's driving a stream of home buyers priced out of markets farther south. Builders have followed the demand, buying up and reviving the unfinished subdivisions that were abandoned during the crash.
Cliff Neves, an ironworker who helped build the Walt Disney Concert Hall in downtown L.A., is among the newest arrivals. The 36-year-old said he moved from the San Fernando Valley with his wife and children. He bought a new four-bedroom home in Palmdale last summer for about $190,000.
"I am not paying $250,000 for a bucket," he said between drags of a cigarette while standing in his garage.
Such cost-conscious buyers once propelled the valley's largest communities, Palmdale and Lancaster, into the ranks of the nation's fastest-growing cities. And their return belies some of the more dire predictions about far-flung suburbs in the wake of the housing crash. Some observers — including Yale economist Robert Shiller, famous for predicting the crash — have speculated that exurbs like the Antelope Valley may never fully recover.
Still, at least for now, rising prices and a desperate shortage of houses for sale across Southern California are again making the Antelope Valley a haven of affordable real estate. Even here, after a vicious wave of foreclosures, inventory has now tightened and prices have jumped.
The median price for all homes sold in Lancaster during the first quarter jumped 17.5% to $141,000 compared with the same period last year, according to DataQuick. In nearby Palmdale, the median price rose 10.7% to $155,000.
"The darker days are behind us," said Mark Troth of Prudential Troth Realtors in Lancaster, recalling boarded-up homes and dead landscaping.
To be sure, the region continues to face long-term challenges, particularly in stabilizing its boom-and-bust cycles. As this new wave of bargain seekers heads north over the mountains, the question is whether transplants will continue to arrive in large numbers, boosting home construction and the local economy.
With rising gas prices, commutes of more than an hour become more than a headache. And many experts say younger home buyers, and even some older ones, now place a premium on walkable neighborhoods and speedy commutes.
"The future in those areas is very uncertain," Tom Murphy, a senior resident fellow at the Urban Land Institute, said of the nation's far-flung suburbs.
The nation's cities — many, including Los Angeles, boasting revitalized downtowns — have increasingly become a focus for growth. From July 2010 to July 2011, the nation's largest cities, in general, grew faster than their suburbs for the first time in more than nine decades, according to an analysis of U.S. Census Bureau data by the Brookings Institution.
That's a big change from the 1980s, when the Antelope Valley, an aerospace hub, boomed on the strength of Reagan-era military spending and skyrocketing home prices across Southern California that pushed thousands out of the cities into cheaper, outlying suburbs such as Palmdale and Lancaster.
But the early-1990s recession and California housing crash put on the brakes. Decreased military spending took away many aerospace jobs; falling home prices across Southern California gave buyers other options for affordable housing. Many new homes that builders had raced to put up in the valley remained vacant.
During the last decade's housing boom, another large wave of families seeking affordable housing arrived in the Antelope Valley, scooping up homes made all the more attainable by easy-money mortgage lending.
When the bubble burst, prices in the Antelope Valley once again fell further than most. Median prices plummeted about 70% in Palmdale and Lancaster, and borrowers defaulted en masse. During the first three months of 2009, foreclosed homes made up nearly four-fifths of homes resold in Lancaster and Palmdale, according to real estate information firm DataQuick.
"Some of these neighborhoods did not look well," Troth said.
But many of the distressed properties have been sold off. In the first quarter of this year, foreclosed homes made up 25.5% of all resales in Lancaster and 25.9% in Palmdale.
The improving market has caught the attention of developers. Half a dozen previously stalled Lancaster subdivisions should be completed by the end of the year after builders took advantage of a city program that reduced building fees, said city spokesman Joseph Cabral.