Real Estate News

Natomas bounces back in a big way after flood moratorium

A look inside Lennar’s 55-plus development

Resident Sharon Sprecher discusses her 2,200-square foot, single-story home in at the Westshore Heritage development in Natomas. Her home includes wide doorways and large hallways.
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Resident Sharon Sprecher discusses her 2,200-square foot, single-story home in at the Westshore Heritage development in Natomas. Her home includes wide doorways and large hallways.

North Natomas experienced a resurgence in new home construction in 2017, with one development ranking among the top 20-selling master-planned communities in the nation last year.

The Westshore area of Natomas was the 16th-ranked master-planned community in the U.S., with 515 home sales in 2017, according to a recent report by John Burns Real Estate Consulting, which advises builders and investors in the new home industry.

Sales at Westshore nearly doubled from 2016, the firm said. They represented about one-tenth of new home sales in Sacramento, Placer, Yolo and El Dorado counties in 2017, according to figures provided by CoreLogic, another real estate tracking firm.

“Natomas has been the star of the Sacramento new home market,” said Dean Wehrli, senior vice president in Sacramento with John Burns Real Estate Consulting, headquartered in Southern California. “It’s really done well.”

That hadn’t been the case for more than a decade in Natomas, the one-time boomtown built on a floodplain surrounded by levees.

In the hyper-driven housing market of the mid-2000s, Natomas was the fastest-growing part of the Sacramento region. It added more than 50,000 residents to the city of Sacramento – about a tenth of the city’s current population – along with millions of square feet of retail and office space.

Then came the housing crash of 2006 to 2011. Prices in Natomas plunged by more than 50 percent as lenders foreclosed on hundreds of houses there. Typical single-family homes that sold for $470,000 at the market’s peak in 2005 plunged below $200,000 by 2011. Block after block was dotted with bank-owned homes for sale.

Adding to the misery, federal flood-protection authorities imposed a de facto building ban on the Natomas basin in 2008 after concerns arose about the adequacy of levees there. Only homes that stood high above potential flood waters could be built.

No houses were constructed on 25-foot stilts, however. A fire station with living quarters perched atop a 30-foot-tall garage was the only structure built between 2008 and 2014.

Natomas was essentially frozen in place for years but began to thaw several years ago when the federal government approved $1 billion for levee upgrades and began to lift the restrictions that led to the de facto moratorium.

Even then, construction was somewhat slow to start. But 2017 saw new homes being built and sold in significant quantities in Natomas for the first time in a decade.

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The Westshore part of Natomas, east of Interstate 5 and south of Del Paso Road, achieved its top-20 results with a mix of housing for “active adults,” 55 and older, and starter houses for young families priced in the $300,000s.

“It’s the most affordable new home market in the core four-county region,” Wehrli said.

Appealing to the two largest population groups, baby boomers and millennials, proved a winning formula, combined with Natomas’ traditional popularity for its ample retail and restaurants and proximity to downtown Sacramento.

Current major builders in Natomas include Lennar, Taylor Morrison and K. Hovnanian, which has seen strong sales at its Four Seasons active-adult community and its offerings of larger single-family homes grouped around the community’s man-made lake.

“It’s a nice master plan with walking trails, parks and a good mix of product offering,” said Mike Wyatt, Northern California division president at K. Hovnanian. “Part of the thing that makes it really nice is its affordability compared to Rocklin and Roseville, and it’s close to downtown.

“After the long drought from the moratorium … we’ve had really strong success since we opened in there, ” Wyatt said.

Hudson Sangree: 916-321-1191, @hudson_sangree

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