For the fourth straight year, Cordillera Ranch real estate sales transactions (including all lot sales, home sales and new home starts) exceeded $100MM. Driven by a 25% increase in lot sales in 2018 versus prior year, the $106MM in real estate activity equaled the most in Cordillera Ranch over the past 10 years.
By Charlie Hill
Through three quarters, 2018 was on pace to be an all-time record but two straight months of rain as well as declining oil prices in the fourth quarter slowed the sales pace towards the end of the year. Fortunately, some of the pent-up demand from late 2018 led to a very strong start to 2019 with a record January of sales activity to kick off the New Year.
Combined lot and home sales totaled 124 in 2018, up slightly from 110 in 2017. There were 43 home sales in 2018, compared to 45 the year before. Tighter home inventory in Cordillera Ranch in the past couple of years has somewhat constrained home sales; however, the 43 home sales this past year were still well above the historical average over the past ten years.
HOME SALES TRENDS
Average home sales price in 2018 was $1.1MM, up 10% from prior year (average home sales price only includes resale/spec homes, not new custom starts). The following chart illustrates the number of homes sold yearly since 2005 (blue line) and average home prices yearly (bar).
Average home sales price in Cordillera Ranch during any particular year can be a little misleading due to the wide variation in property prices based on some key pricing factors. For example, golf course frontage, river frontage and premium view properties carry significant premiums over their counterparts and thus in years where we have a higher proportion of sales of homes with those attributes, the average price will be pushed higher, whereas when non-view/non-golf, Ranch community homes are a much higher proportion, the average home price may skew down slightly. In 2018, 74% of home sales were in the Ranch community versus other areas, down from 80% and 84% in 2016 and 2017, respectively.
The following chart helps illustrate the wide variation between the Ranch community average home price sales over the past three years versus the rest of the neighborhoods in Cordillera Ranch.
Three other major factors in prices of resale homes in Cordillera Ranch are: 1) whether the home was built by a Preferred Builder, 2) when it was built and 3) whether it has a Master Full Golf Membership to The Club. Homes originally built by our Preferred Builders re-sold in 2018 for 30% more than those not built by Preferred Builders. Year-after-year, Preferred Builder homes sustain the best resale value versus their competitors. Also, The Clubs of Cordillera Ranch were opened in 2006 and homes built after that period resold for a 37% premium in 2018 compared to homes built prior to The Club opening. Finally, as illustrated below, the value of a Master Golf Membership is becoming an increasingly important factor in the marketability of properties, as evidenced by the 42% price premium for homes sold in the past two years with a Master Golf Membership versus those without. As more buyers recognize the long-term importance of having a golf membership that won’t be recalled, the value of one with a property purchase becomes more impactful. The only way to acquire a Master Full Golf Membership is to purchase one with a home or lot that has one (such as a developer lot).
Cordillera Ranch Realty continues to be the leader in real estate sales in Cordillera Ranch, with 155 lot and home sales over the past three years: more than double the sales in the community by any other broker. With unmatched market knowledge, access to the largest list of prospective Cordillera Ranch buyers, and the most sophisticated real estate professionals located in the community and ready on short notice to open and show a home, Cordillera Ranch Realty listings have sold for an average of 30% higher per square foot than listings by other real estate agents over the past five years. Furthermore, with the addition of the new Visitor Center showcasing a modern setting complete with high-tech touches, Cordillera Ranch Realty is set for the future to continue to be the leader in sales.
LOT SALES (including developer and resale lots)
Lot sales in the community continued to increase in 2018 with a total of 81 lots sold in the community (up 25% from 2017) at an average price of $261k per lot (9% increase). As with home sales average price, the average price per lot can be somewhat misleading because lot prices vary widely in various areas of the community. The following chart shows average lot prices by area along with the number of lots sold in each area (all lot sales figures in this report include both resale and developer lot sales).
Due to the continued strong lot and home sales activity, inventory in the community has dropped significantly in the past few years. The majority of the home demand in recent years is in the $750k to $1.5MM price points and, as the following chart shows, inventory remains tight with only five homes in each of the three price bands in that segment, representing a six-month supply of homes (which at these upper-end price points is considered balanced or even tight supply). Note: inventory is based on 1/31/19 MLS data.
Furthermore, an analysis of the comp inventory in the area reflects that the month’s supply of homes by price point in Cordillera Ranch is below the comp market at every tier.
A few highlights regarding current inventory levels:
• Historically, available home inventory has ranged from 40-60 homes on MLS at any given time; home inventory on MLS is down to 30 homes as of 1/31/19;
• The median home price per square foot on MLS is $291/sf, up from $254/sf 12 months ago;
• Four years ago, there were 25 homes on MLS below $250/sf; today only 9 homes are below $250/sf;
• Overall average on MLS: $325/sf, which is driving more buyers to see the value in buying a lot and building a custom home;
• Only 1 home available under $750k;
• Lot inventory reflects 63 lots on MLS with a median of $250k and average list of $305k; ranging from $135k to $1.5MM
NEW HOME STARTS
There were 25 new home starts in 2018 and there are currently 40 homes under construction, of which 39 are sold. Additionally, there are another 43 homes in architectural review committee, indicating continued strong home construction activity for 2019. Approximately one-third of the homes under construction are in Clubs Village, and Garner Custom Homes leads the way with Preferred Builders handling approximately two-thirds of all home construction.
With all of the lot sales and new home construction activity in the past few years, we are in the process of developing several new expansions to Cordillera Ranch. Current home site development includes: the construction of the 21-lot addition along hole number 12 of the golf course (Unit 207F) — representing the final release of Golf Frontage estate lots on the Nicklaus Signature Course and the 15 large estate view lots at Cordillera Ridge near the Highway 46 entry. Both units are scheduled to be paved this spring and lot sales are currently under way.
In late 2018, we moved into the new Vista Offices on Cordillera Trace near the Highway 46 entrance. These upgraded offices provide ample meeting spaces for several operations include Cordillera Ranch sales and development, DH Investment Company, Cordillera Ranch Property Owners Association management and Pasadera Builders. Additionally, Jim Terrian of J. Terrian Designs and Mac Northington have offices in the new facility.
With strong sales activity in the Springs this year, we’re in planning on the next phase of lots in this 2,000-acre section of Cordillera Ranch. Lots in the current phase generally range from just under an acre to four acres and provide central water and sewer service. Also, the Springs Sports Park is now completed and open for use by all Cordillera Ranch property owners (not just Springs property owners). We’ll be hosting a “Springs” Fling on March 30th at the new Sports Park with games, sports clinics, food and beverage and other fun activities, so stay tuned for emails with more details and RSVP info. It will be a great way to come see how nice these new sports fields are.
Lastly, as you may have noticed the Lodges at Cordillera Ranch are under construction and the first Lodge (6-unit) is scheduled to be complete in June 2019 with the second Lodge (4-unit) slated for completion in 4Q19. These will offer a great way to host your friends and family in the community — without the hassle of preparing and cleaning up your home! Or if you’ve not yet completed your home in the Ranch but want to enjoy the amenities, they’ll be a great place to spend a long weekend, within walking distance from the clubhouse.
If there are any real estate needs that CR Realty can help you with, please feel free to give us a call at 830.336.3570 or stop by the new Vista Offices and speak with one of our Cordillera Ranch representatives. If you’re interested in a more detailed market report that was presented to Club members and residents, you may go to this webpage: