p>Pepper Lane, a new townhouse community from Pulte Homes, is breathing new life into the Berryessa area housing market. Having lived in the Milpitas/San Jose area for the past 27 years, I've driven past the barren lot of land on Berryessa by the Highway 680 entrance countless times. At the moment, the site looks like a mining operation with big open pits and a pile of dirt two stories tall.
This whole area used to be full of orchards and now that the farmers have left, there are now about a dozen large vacant lots spread throughout the Berryessa/Alum Rock area and this one is a particular eye-sore. For nearly a decade, the city has planned and abandoned a community center to be built on the site. Even during the heights of the housing boom, the city was not able to attract a developer, to my great consternation.
Now that Pulte has decided to take the plunge, all the local residents, including myself, have a lot to look forward to. From what I've seen in all the distressed properties around here, Pulte is a solid builder, leading the other publicly traded builders in build quality. This should attract high-income young families and bring plenty of new property tax revenues to
Based on the builder's copy about the community, the per sq ft price will be at least $250 and will likely be closer to $300. As this new community is in proximity to pockets of newer homes in the area, the expected comparable sales figures from the 301 planned units should help housing prices in the area recover faster.
Since the builder broke ground about a month ago on unfinished lots, we can expect initial model homes to be ready in about 7-9 months. So, these homes will not have an impact on sales this calendar year. Starting next year, the builder should be able to complete 3-6 units a months and sell through the community in about 3-4 years at the current absorption rate. As starter home buyers prefer new homes, these units will very likely outpace the sales of older homes, particularly those built before 1990.
Finally, I just have one recommendation to the builder and that's to change their copywriter. The whole message about renting being tedious is a flimsy reason for someone to buy instead of rent. More fundamentally, for the younger families targeted by this community, the cost to buy is currently less than the cost to rent a comparably new and spacious apartment.
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