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