Now is the perfect time to build a house that companies are building in the oilfields. Nary an eyelash was beaten last month when two of the housing market’s biggest homebuilders – based in Pennsylvania Toll brothers and headquartered in Florida Lennar – acquired 173 acres of land in Montebello, California, from Sentinel Peak Resources, a company that owns oil development land along the Golden State.
In a project that companies have dubbed “Metro Heights,” 1,200 homes are planned in Montebello Hills, 10 miles east of downtown Los Angeles, which has been pumping oil since 1917. A new twist controversial old project, the land is already cleared, and companies are looking for home buyers.
The Metro Heights website reads, “There will be active oil wells outside of the residential area. But he assures us: “No house will be built on abandoned oil wells.”
Metro Heights is part of a US residential construction market that is “totally bizarre,” said Tim Costello, CEO of Bdx inc., a site for new housing advertisements.
“I never remember a housing market that looks like this,” Costello said.
What “it” is are factors which in themselves are extraordinary. Record demand partly fueled by historically low mortgage interest rates. Low supply and officials recognizing the supply crisis. A shortage of materials that makes the price of wood a surprise national obsession. White collar workers in their second year of telecommuting and looking for a space.
The timing means home builders are moving in multiple directions at once and can feel like they’re throwing paint on a wall that isn’t wood. But make no mistake – if you’re an established home builder, it’s a roaring time.
“Put simply,” said Douglas Yearly, CEO of Toll Brothers during an earnings call earlier this year. “It’s our time.”
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