Why Modesto’s housing market is on the uptick. Just where are they building?

Why Modesto’s housing market is on the uptick. Just where are they building?

Jan 31, 2018 | No Responses

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It’s not just your imagination. They really are building new homes again.

But it’s not like before, meaning a decade and more ago, when model homes were a common sight throughout Stanislaus County. These days, new-home construction sites are struggling to make a comeback.

“It’s kind of exciting, to see new streets going in,” said Dennis Fitzpatrick, president of Fitzpatrick homes, which is building a new subdivision in Turlock and hopes to do so soon in Modesto.

“The market really is coming back,” said Rick Hughes, Florsheim Homes’ sales and marketing director. His company was sweet on Modesto before the sensational real estate collapse around 2008, and is among those behind Modesto’s modest rebound in recent months.

New-home companies took out 213 building permits for houses in Modesto in 2017, representing the third consecutive year of lukewarm growth. That’s pretty good, considering only 11 permits were issued in 2014.

But few are jumping for joy, because it’s nowhere near the 2005 peak, when City Hall issued 881 new-home permits. Most builders remain cautious, said John Beckman, chief executive officer for the Building Industry Association of the Greater Valley.

“It’s definitely about time,” Beckman said of home construction picking up in spots, including Patterson, Ripon, Riverbank, Oakdale, Denair and Keyes. “But it’s a very risky business.”

Several construction outfits discovered that the hard way, and went bankrupt when the bottom fell out 10 years ago as building skidded nearly to a halt.


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Reinventing themselves

Others regrouped, hunkered down and waited. Fitzpatrick tried to keep busy building Bay Area stores, and a funeral home in San Jose. JKB Living branched into solar, specializing in farm projects.

Florsheim bought up lots in failed subdivisions and finished them, in several communities from Reno to Palm Springs. “We went wherever the opportunity was,” Hughes said.

The market, all but dead around Modesto, stayed decent just up the road in Manteca and Lathrop, an area enjoying an impressive rebound.

Lathrop’s River Islands community, for example, built two new schools, a fire station and a new bridge over the San Joaquin River, all to serve nearly 1,000 homes either recently finished or under construction. Buyers can wander through 23 models open in seven neighborhoods, said the project’s director Susan Dell’Osso.

“We are getting spillover from home buyers who are priced out of the Bay Area market,” where “job growth is very strong,” Dell’Osso said.

That enthusiasm hasn’t yet extended to Stanislaus County, and may not.

“There are good signs (here), but it’s not 100 percent good,” Beckman said. He predicts slow and steady growth here for the next two or three years, but nothing spectacular.


Partly, because strong wage growth in the Bay Area hasn’t been replicated in the valley.

“We never fully recovered,” said Bill Zoslocki, a longtime home builder elected to Modesto’s City Council four years ago.

Beckman said buying a home can be like buying a car: “If you have a lot of money, you buy new; if not, you buy used. Unfortunately, we can’t build a used home. So you wait for the equation to change.”

Willing to take a chance

Some want to be in front of the curve.

JKB Living, for example, recently finished subdivisions in Denair and Hilmar and is nearly done with others in Oakdale and Patterson. The company has plans for apartments in Modesto and Hilmar, and is starting a second phase of apartments in Ripon.

“The demand is there” for multifamily housing, said the company’s Tara Brennecke. “Research shows a lot of people would rather rent, and they want a nice product, higher end.”

Florsheim is flourishing in Modesto, with projects in Village I and plans coming up on Pelandale Avenue and also a long-vacant field on Dale Avenue north of Vintage Faire Mall, with a 150-home site starting later this year.

Windward Pacific Builders and Century Communities are busy in Modesto, too, as well as some outlying cities.

Lafferty Communities and Tesoro Homes are building in Oakdale.

Bright Homes finished a project in Keyes and has another in Patterson.

In addition to its Turlock subdivision, Fitzpatrick Homes hopes to start others this year in Modesto and Hughson. “We are seeing traffic picking up. We feel confident moving forward with new projects,” Fitzpatrick said.

Some predict modest growth for the near future.

“What you’re seeing now probably will continue for another two or three years,” Beckman said. “There still is not enough (new homes) to satisfy demand, so prices will rise and will go up too, and low-income folks will have a harder time making ends meet.”

John Anderson of Ripon-based J.B. Anderson Land Use Planning does work for several cities, including Riverbank, Waterford and Lathrop. He said, “It’s honestly nice to see some finishing lots sitting out there in Village I.”

“But anybody who lived through this economic depression will tell you, ‘Man oh man, we’re gun shy’,” Anderson added. “They should be. If not, they’re crazy.”

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