Homes and Heartaches

Beautiful new homes in master-planned communities are selling fast in Orange County, but as housing prices continue to outpace salaries, where will tomorrow’s families buy?

With the fast-rising cost of housing in Orange County, what choices are left for a young family looking to buy a new home? Is life in a modern village, in a just-built energy-efficient house with a gourmet kitchen and a laundry room upstairs even possible?

The lure of living in one of the idyllic planned communities for which OC is famous--with country-club-like settings for the community pool, organized activities for the kids and plenty of adjacent trails for hiking and biking--continues to draw thousands homebuyers monthly. In fact, most homes are grabbed up within minutes after they are offered and potential buyers need to register at least two to three months in advance of the opening.

Yet these homes may be out of reach for a new family that is just entering the housing market and has not yet benefited in equity. The median income for a family of four in Orange County is about $74,000, the Orange County Affordable Homeownership Alliance reports. Low income is considered $52,500 (about $25 per hour wage), and very low income is about $37,000 ($17 per hour).

Statistics show that, based on income, only 20 percent of OC families can afford the median-priced home--$523,000. Compare that to the statewide median home price of $405,720 – factoring in the fact that home prices have outpaced income nearly two-to-one in the past 15 years – and you begin to understand what’s happening in the OC. Incomes are not being helped by an essentially “jobless” economic recovery. The Labor Department reported that only 13,000 jobs were created across the country in January 2004, far fewer than the Administration’s prediction of 300,000 for the month.

Many Orange County families have moved to neighboring Riverside County looking for better housing deals. But prices in Corona—where 10,000 new homes have been built in the past decade--and other Riverside cities are outpacing Orange County’s rate. The California Association of Realtors reported the median home price in Riverside/San Bernardino jumped 28.5n the last 12 months to $245,090. Factor in the longer commute with rising gas prices, along with increasingly clogged freeways, and the move isn’t the bargain it used to be.

Alex and Mary Saltzman, who grew up in Orange County, ended up looking for a home—and buying one—out in the high desert area of Hemet. With three young children and a fourth planned in the near future, buying a big enough house to hold them all was essential, even if it meant a hellish commute for Alex of three tedious hours. They found a new four-bedroom house with a big backyard for $154,000 but for Alex, a lifestyle change took place.  He rose at 3 a.m. to be at his OC job at 6 a.m. and returned home each night tired and cranky from the drive. “The time I spent with my kids,” he admits, “wasn’t what you would call ‘quality time.’”
He recently gave up his job in OC for work closer to their new San Jacinto home, and has no regrets about their decision. “The housing prices [in OC] just sky-rocketed. You’d think they have gold in their houses for what they’re charging….We knew what we wanted, what was important to us and our family—we found it here.”

The Saltzman’s flight from OC is becoming increasingly common, but OC is still growing at the rate of about three percent a year, and that means no end in sight for the housing crunch. Trinh LeCong, executive director of the Affordable Housing Clearinghouse based in Lake Forest, says affordable housing is an Orange County issue that won’t go away. “Southern California is such a desirable place to live, there’s always going to be a crunch. There are a lot of jobs and lots of people want to live here.”

LeCong’s organization works to secure funding for private developers who build affordable homes. The clearinghouse also provides a subsidy to homebuyers called a “silent second,” which increases buying power by providing a second mortgage to new home buyers. Both elements are necessary in such a tight market, LeCong explains.

“I think in this market you could sell a grass hut on a piece of land,” she notes.
As long as rates stay low (they are still at under 5.5 per cent or a 30-year fixed), buyers who have already been homeowners and have profited from the price spike, can make the leap to the houses in the planned communities of Irvine, Ladera Ranch and Talega in San Clemente. But just what are the options for a family with young children looking to buy their first home?

A scan of some of the master-planned communities in the county reveals that, yes, in ocean-scented South County, single family residences, generally starting at mid-$600,000, may be out of reach, even for a dual-income husband and wife. However, builders have addressed this dilemma by offering townhomes, and even apartment rental units in these South County developments. You can secure a prestigious Talega address, for example, for the cost of what homes used to sell for just five years ago (mid-$400,000s). Granted, it's a townhome (more often described these days as an "attached home") of about 1500 to 1800 square feet, but with many new designs, the privacy, quiet and sights from the windows offer more of a house feeling than you might think.

New homes today have many more features and design enhancements than those built just 10 years ago.  Builders have become creative with small townhome plans, by designing for the ways in which families use their homes, according to Todd Palmaer, president of Standard Pacific Homes’ Orange County division. One trend Palmaer has noticed is how today’s families utilize space. Gone are the days of formal living and dining rooms that were central to the social lives of older generations. According to Palmaer, many Orange County families use the living room as a den, home office or extra bedroom.

“Families are looking for flexibility in spaces,” Palmaer notes. Standard Pacific designs more “tech” areas throughout the home, including a small desk area near the kitchen for the family PC. Computer network wiring is becoming standard on most new floor plans, he said. As Palmaer explains, skyrocketing home prices in Orange County are a result of an increasingly limited land supply. To combat rising home prices, developers such as Standard Pacific are trying to design more density in their communities. Palmaer says that buyers may sacrifice a little square footage in the bargain, but placing more houses per acre helps builders keep prices lower.
Before you make a move into one of these planned communities, make sure you're comfortable with association fees (which can close to $400) and the often nagging community laws that come with a planned community, like getting fined for leaving your trash cans out one day too long or leaving the garage door open during a Saturday afternoon.

It's no surprise that the farther you head inland, the greater the options, but you don't have to move to the desert to find shelter. New homes in centrally-located Orange are starting in the mid-$500,000s. Farther north, lower prices can be found in Corona, where there is plenty of dairy land to convert into housing developments. In this neck of the woods, you've got to apply the age-old equation of house quality versus commute time--in this case on the 57 or the 91. If you like the idea of eating dinner as a family and you don't want to be a stranger to your child, townhome living or renting may be your best options depending on your work address.

Following is a selection of community profiles where master-planned communities offer homes starting at the mid-$500,000s and below --with information on school scores, family recreation options and ethnic mix. Since these homes get snatched up quickly, the smaller developments could be sold out by the time you read this issue, but in the larger developments, you'll find a good supply. And more new homes are on their way--in places like Tustin Field (John Laing Homes) in Tustin and inside the massive Great Park development just getting under way.

Costa Mesa

Nestled between Santa Ana and Newport Beach, this community of 104,000 residents boasts 26 parks (with a great dog park), two libraries and 19 private schools. Costa Mesa has a sizeable civic center and several parks. The city is about 60 percent white, with large Hispanic and Asian segments within the population. Costa Mesa enjoys a lower than average crime rate. Cultural centers include the Orange County Performing Arts Center, Orange County Fairgrounds, South Coast Repertory Theater and one of the busiest shopping districts in the nation, South Coast Plaza. For more information, call the Costa Mesa Chamber of Commerce, 714 885-9090.

Home-Buying Assistance Note: The Costa Mesa Redevelopment Agency is offering down-payment assistance of up to $40,000 to low-income families. Don't let the term "low-income" fool you. According to their qualifying terms, a family of 4 is considered low-income at a combined household earnings total of $90,000. Call the Housing Hotline at 714-754-4892.

New Townhomes: The Laurel in Providence Park is a gated community that has sold 64 of its 83 planned homes. Another phase opens in April that includes 13 more homes. The development includes a village environment with a centrally-located park, as well as a pool, spa and neighborhood gathering areas. This Standard Pacific Home development offers two-story, 1,500 square foot townhomes in Spanish and European styles. A three-bedroom condo starts in the low $500,000s. For more information, call 714-327-1937.

Is it worth the drive? Maybe. The median price for a new home in Corona is $357,052, one-third less than that of Orange County. Located in Riverside County, Corona is a community of 138,000 people with nearly 400 acres of parks and public spaces, along with libraries, golf courses and museums. The city is host to the new 33,000-square-foot Fender Museum of Music and the Arts, which includes an education facility, digital recording studio, amphitheater and art gallery. More than half of the adult population attended college. The average household income in Corona is $74,000, with 25 per cent of all households earning $100,000 or more. Corona is an ethnically diverse community, with about 36 per cent of the population Hispanic, eight percent Asian, and just over six percent African American. Corona is considered the safest city in the Inland Empire. Corona Chamber of Commerce:  909-737-3350.

Corona Single Family Homes: Selling began in December at Standard Pacific Homes’ Heartland Estates just north of Corona. These single-family homes offer three-bedrooms and three-baths starting at $447,900. Six diverse, two-story designs with stone, brick and wood features are available. 909-817-8507.
Standard Pacific also offers Providence Ranch, a master-planned community with homes from 2,451 to 3,285 square feet starting at $406,000. Providence Ranch started selling one year ago but will open 15 more new homes for sale at the end of March. 909-279-6437.


Located in the southeastern section of Orange County, this city of 165,000 bills itself as one of the nation’s largest planned urban communities. Irvine’s population is predominately white or Asian. Nearly 40f city residents hold a college degree. Irvine has a fine arts center, child resource center, nature center, skate park, and an off-leash dog park. The city maintains 29 neighborhood parks and 11 larger community parks with numerous recreation activities. Irvine’s 23 elementary schools, five middle schools and four high schools consistently score in the 90th percentile on achievement tests, and more than 9 in 10 high school graduates attend college. Irvine also boasts the University of California at Irvine and Concordia University, a liberal arts institution. Irvine’s overall crime index is well below the national average. For more information, contact the Irvine Chamber of Commerce, 949-660-9112.

Irvine Townhomes: Two areas are offering townhomes that start below $450,000: Turtle Ridge and Quail Hill. At Turtle Ridge, the Ashton Green development will offer a new phase of 16 homes in September. The townhomes are built by Shea Homes and are surrounded by centrally-landscaped yards, open space reserve, city profile and ocean views. Pools, spas, picnic areas and nature trails abound, offering lots of recreation opportunity for families. Homes range from a too-small 822 to 1,445 square feet with designs reminiscent of European cottages. Prices range from $450,000 to $520,000. Phone: 949-509-7745.

At Quail Hill, Sage, built by California Pacific Homes, includes 112 detached condominiums (they don't share walls but are classified as condos because of the density). Sage is about halfway through their sales and advanced registration is a must. Sizes range from 1,100 square feet to 1,500 square feet. Phone: 949-679-1681.

Best Irvine Home Buying Resource: The Homefinding Center, located at the Irvine Spectrum Center. Call  866-377-4228.

The Great Park--The city recently annexed the former El Toro Marine Corps Air Station, boosting the city’s size to 55 square miles – the largest in Orange County. The newly acquired land, located where the 5 the 405 and the 133 intersect, will be developed into the Orange County Great Park and it will be one of America’s premier metropolitan parks with a low-density residential community. According to plans, the homes will be offered for sell in three years. The Great Park will provide 3,885 acres for open space, habitat preserve, education and other public uses. By comparison, Balboa Park is 1,200 acres, Golden Gate Park is 1,017 acres and Central Park is 843 acres. Under the Great Park Overlay Plan, the El Toro property will become a master planned community dedicated to open-space uses, including Meadows Park, a sports park, an educational campus, an exposition center (including museum and cultural activities) and a wildlife corridor. A total of 3,625 homes and 3.0 million square feet of commercial and industrial space will be developed. For more information and to get e-mail updates, go to http://

Ladera Ranch

The 4,000-acre Ladera Ranch "hometown" is designed as a complete master-planned environment, offering a range of homes priced from the high $300,000s to more than $3 million, along with public and private schools, parks, recreational facilities, shopping, services and places of worship. Located in the southeastern tip of Orange County just north of San Clemente, Ladera Ranch will include several schools to be integrated in the Capistrano Unified School District. The schools will be close to residential areas, parks and playgrounds, and nature preserves. Ladera Ranch also has plans for a 24-acre sports park with ball fields, six league-standard soccer fields, children play areas and space for picnics. A community swim center with a junior Olympic pool is also planned, along with athletic fields and playground areas. Over 1,600 acres of surrounding open space and miles of trails offer numerous recreation opportunities in Ladera Ranch.

Townhomes:Terramoor-- The latest phase in Ladera Ranch, Terramoor offers four different townhome villages among its 1260 homes: Sutter’s Mill (Centex Homes), Briar Rose (MBK Homes), Branches (Standard Pacific Homes) and  Bannister Street (Standard Pacific). Sizes range from 1,327 to 2,100 square feet, and pricing starts in the mid-$300,000 on up to the high $400,000s. You'll need to get on the priority list even to be considered a buyer. Terramor is designed around a Central Paseo through which one can access a variety of garden and activity areas that promote community interaction and connectedness, such as a children's adventure playground, bird sanctuary, open turf for lawn games and much more without having to get in the car or cross a major street. The village's adjoining ridgeline will lead to more than 10 miles of trails and 1,800 acres of scenic protected lands that encircle Ladera Ranch. See builders directory (on page tktk) to register. For all Ladera housing info, phone (949) 388-8100.


Want to be in the middle of everything? The City of Orange, a community that manages to combine history with hipness, is located in the heart of the County. In addition to numerous parks with lakes and equestrian trails, Orange has the Orange County Zoo--home to 130 birds and animals native to the Southwest, including a mountain lion and a bear. The facility also includes a petting zoo for smaller children. In addition, Orange has a nature center surrounded by 10 miles of trails. The city, with a population of 135,000, boasts the 46,000-square-foot Vans Skate Park, the largest skate facility in the world. Other urban park amenities include pools, playgrounds and athletic facilities, as well as community golf courses. Orange has 37 public schools that serve 28,000 students. Several private schools also serve Orange residents. City population is about 55 

per cent white, 32 per cent Hispanic, and 10 per cent Asian. Orange enjoys a lower than average crime rate in all major categories. For more information, call the Orange Chamber of Commerce and Visitor Bureau, 714-538-3581.

Orange Houses: Casita at Serrano Heights--You would have to move fast on this one. Only four of eight phases that encompass the 121 homes in this mini-planned community (at least compared to Ladera Ranch or Talega) have been sold but pre-registration two to three months in advance is required. A new phase of 14 homes opens on April 3, and the showing is closed to all but the pre-registered. These are single family residences--not townhomes--at Casita at Serrano Heights. Built by Centex Homes, the community of courtyard villas and single family homes range from 1,946 to 2,351 square feet. Centex touts Casita’s convenient location near beaches and within commuter range of almost everything. Prices are at the high end of our survey, starting in the mid-$500,000s. Phone: 714-637-4589.

San Clemente

Known as the Spanish Village by the Sea, San Clemente is located in the southeastern tip of Orange County. This city of about 50,000 people has numerous parks, including some of the best beaches along the Orange County coastline. San Clemente schools have garnered state and national recognition, among them the coveted Nation Blue Ribbon award and designation as California Distinguished schools. San Clemente is predominately white, and has a lower than average crime rate in all major categories. For more information on San Clemente, call the Chamber of Commerce, 949-492-1131.

rdana; FONT-SIZE: 10pt">Master-Planed Community: Talega--A village of its own, located in the hills three miles east of San Clemente beaches, Talega is a 3,500-acre master-planned community encompassing a total of 3800 homes of various type, size and budget (from mid $400,000 to over $2 million). It is now half built and will continue to sell for another three years. Two-thirds of the 3,500 acres will remain open space set aside for parks and trails. Talega also has its own K-8 school (Vista Del Mar opened in the fall of 2003), a Fred Couples designed golf course and a family-focused swim and athletic club with splash pools for the kids and an Olympic-sized pool for competitive swimming. Two more recreation centers are planned as future phases open in 2005 and 2006.

Townhomes: Opening this month (April) are the Verano triplexes, 140 homes built by Lennar Homes that will be selling in the mid-$400,000s. Mediterranean-styled with mountain views, they range in size from 1,255 to 1,750 square feet with 2-3 bedrooms and two-car garages. Phone the Talega Welcome Center: 949-492-3393.

Low-Income Housing: Talega also has apartment rentals aimed at low-income families. For more information, call 949-262-7589. 

Home-Finding Resources


Funding Assistance--A variety of agencies in Orange County financial information for lower-income first-time homebuyers, such as down payment assistance and second mortgages at low rates. For information, contact The County of Orange, 714-480-2900.




Note that prices and availability on the internet are often out of date. Make a phone call to confirm the information. national home-finding website with information on each Orange County residential development. Includes builder contact information, location maps, floor plans and articles on the process of home-buying. New Homes magazine website. Includes builder contact information, community resource hyperlinks, a loan calculator and listings of all OC offerings. --This website sorts by builder, region (North or South County), or price.

Home-Builders in this Article

For a complete list of home-builders in Orange County, go to one of the home-buyers websites listed above. 

Lennar Homes,, 949-598-8500

Centex Homes,, 949-453-0113

MBK Homes,, 949-789-8300

Standard Pacific Homes,, 949-789-1600

Shea Homes,, 714-985-1300

California Pacific Homes,, 949-833-6000

John Laing Homes, www.johnlainghomes, 949-476-9090 

Rating the Rates: Fixed or Adjustable?

You might be surprised to learn that a large down payment isn’t essential to getting a good deal on a home loan. As Eric Nelson, vice president of mortgage retail lending for Bank of America, explains, about 70f the Orange County middle income buyers he deals with have less than 10o put down on a home. Smaller down payments are much more prevalent today than in the past.

In today’s low mortgage rate environment, there are many borrowing options, including fixed rate mortgages and adjustable rate mortgages (ARMs). Generally ARMs offer a period of time (three to seven years) when the rate is fixed, followed by a rate that fluctuates with the market. Fixed-rate loans remain stable throughout the duration of the loan. One solution many Orange County buyers choose is an adjustable rate mortgage (ARM) because they’re generally easier to qualify for.

Which one is better for your family depends largely on your plans, according to Nelson. Planning on staying in the home 20 years? A fixed-rate loan is probably your best bet, especially considering the record-low interest rates (under six percent) that have helped many first-time buyers afford a home.

However, if you’re buying a starter home that you plan to use as leverage for something better in a few years, Nelson recommended an ARM.

Regardless, what is essential is a good credit score. While flawless credit isn’t necessary, a credit score of 680 is needed to qualify buyers for most mortgage programs.

“Often times too much credit is just as damaging as “bad” credit,” Nelson says.

The next step is to qualify for a loan. Nelson also notes that almost all realtors require a pre-approval letter from a major lending institution before they show buyers around.

As for those skyrocketing home values in Orange County, Nelson encourages buyers to keep in mind that the current rate of home appreciation won’t continue indefinitely. Home values will start to slow at some point.