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Building permits spike in Solano County, fueling housing boom

New residential building permits in Solano County rose sharply to 1,697 in 2020, a level of housing permit activity in the county has not been seen since the 2007 Great Recession, according to Jordan Levine, vice president and chief economist with the California Association of Realtors.

At 716 permits, the number of multifamily housing permits issued last year was the highest since 2001. Higher costs for building supplies, especially lumber, is a factor driving multi-family dwelling growth, since the cost per square foot is considerably less, however, existing and new single-family units still dominate the market during the current real estate boom.

“Solano County has been asleep — but is now fully awake! We are definitely in record-setting territory where we’ve never been before,” said David Clutts, president of the Northern Solano Association of Realtors and a broker associate with Country Estates Realty in Fairfield. “Solano is the last affordable county in the Bay Area. However, if you want to buy here, you must have enough cash in your bank account to cope with bigger counter offers. For newcomers, it’s like going to an auction. In a volatile market, it is always good to exercise caution.”

He said real estate agents are in a don’t-hate-it market.

“I don’t know how long this will last, but May and June will be the biggest months of the year for home sales,” Clutts said. “The market is expected to slow in August when kids will probably go back to school in full force and parents won’t want to uproot them to make a move.”

Nicole Solari, founder and broker with Level Up Realty, said homebuyers from elsewhere in the Bay Area are competing for Solano homes.

“Few would have believed a year ago that this market would be so hot,” she said. “Buyers include those moving up to buy more bedrooms, as well as those coming from the Bay Area during the wave of outbound migration. Now is the best time in history to sell. Prices are at an all-time high, leading to bidding wars, but home prices in Solano are still lower than in many parts of the North Bay and Bay Area.”

She noted that home insurance is not that difficult to obtain in communities not located in fire zones. For homeowners in fire zones, it is much harder. Some buyers have had trouble getting FEMA flood insurance.

“There are pockets of opportunity in places like Vacaville that continues to grow with the military presence, outlet malls and more companies continuing to locate to this area. With lower housing prices than those in surrounding counties and cities, Solano has become a good option for those priced out of areas such as the Sacramento market,” Solari said.

The alternative work site trend made mandatory for many during the SIP phase of the pandemic is also fueling interest in moving to more affordable areas, said Joe Brasil, an agent with Coldwell Banker.

“The employer for one of my clients gave him a two-year work-from-home contract enabling him to look for a more affordable home, since a long commute no longer part of the equation,” Brasil said.

The question is, how long will remote work arrangements last, or will most employees be required to return to urban offices in the future?

For Kathy Rojas, an agent with REMAX Gold, the current market is insane with people desperate for home ownership.

“At the beginning of the year, one could buy a home in Solano in the $400K range. In February things turned and we started seeing spikes up to $700K on average.

“It’s scary for buyers right now as many are in a panic mode to buy a home before prices rise even more,” Rojas said.

According to Rojas, for buyers with loans backed by the Federal Housing Administration and Veterans Administration, the situation is worse, because those in this category often do not have enough money to compete when creative bids that can go $30,000 or more over appraised values.

She said there are waiting lists for new homes. “People will probably remain in a panic mode until interest rates change, which is not expected for a while.”

Unincorporated areas of Solano County are also seeing growth with a combined total of 1,300 commercial and residential permits granted, and with more single-family dwellings this year due to rebuilds from last year’s LNU Lightning Complex fire, which includes the Hennessey Fire, according to Saeed Iravani, building official with the County of Solano Building Division. The unincorporated residence category includes primary and secondary homes as well as new single family and secondary manufactured homes.

“There are so many buyers, but so little inventory,” said Matt Walsh, Solano County’s principal planner. “County agencies in the state are beginning the process of updating the housing elements of their General Plans. With a state housing shortage of all types, local agencies will be providing more density flexibility to help do their part in meeting demand. Each agency is required to plan for a certain number of housing units (divided by income tiers) and provide General Plan policies and programs to meet these goals.”

While the Solano housing market continues to be robust, there are only a few new developments with large numbers of units, supplemented by expansion plans that include incremental additions within a larger group of existing communities.

The following is a small sampling of housing projects in or near Solano’s cities, based on multiple listings service reports and city planning data.

Fairfield

“ Fairfield is one of California’s hottest markets in 2021,” said David Gassaway, assistant city manager. “I’m not surprised that businesses and residents alike are flocking to Fairfield because of our moderate real estate prices, proximity to larger metro areas and positioned as the North Bay’s business and industry hub.”

In 2020, Fairfield issued 385 single family housing permits and 471 multi-family units with both categories planned for completion by 2022. In 2020, single family new home starts were up 5% from 2019. In the first 4 months of 2021, new single family residential homes on pace in the pipeline total upwards of 600 units – an increase of 70% from 2020.

Vacaville

The northern Solano city has several projects in the works or completed, including Cambridge at Brighton Landing by Meritage Homes and Sheffield at Brighton Landing by the New Home Company. Sheffield will have four floorplans with two to four bedrooms in this community of 500 residences.

Vallejo

Solano’s largest city last year approved entitlements for 280 housing units and issued building permits for 41 units in 2020, and now 159 housing units are approved or under construction, according to Christina Ratcliffe, interim planning and development services director.

Vallejo’s share of the latest regional housing needs allocation for Solano County totals 2,921 units to be built over the next eight years, of which the city has 2,200 to 2,300 units in its plan projections, said Planning and Development Services Director Gillian Hayes.

Suisun City

City officials reported entitlements have been granted for the Lawler mixed-use project and the Olive Tree Ranch Development. Lawler would have 75 apartments and 7,200 square feet of commercial space. Olive Tree is planned to have 70 single-family residential units, but the application is pending completion of a traffic study.

Development applications have also been received for Marina Apartments and Blossom Avenue Apartments.

The three-story Marina project would have 160 affordable multifamily units on 5.2-acres. Blossom is envisioned with 180 multifamily units on 9.09 acres.

Dixon

According to officials, Taylor Builders LLC is creating a development that will offer 1,046 single-family homes as part of a 518-acre master-planned community called The Homestead. The first of five separate communities has been completed and includes five home plans to be built by Meritage Homes.

Another community, called Dixon Orchards, is in the development agreement stage, according to Ross Hilshiem, a representative for the California Capital and Investment Group. Initially planned to have multifamily homes along with existing dwellings, it will now also include community commercial uses — a restaurant, bank and personal services — focused on serving the recently built multifamily project and existing homes.

Rio Vista

Officials reported that the Luminescence at Liberty project by DeNova Homes will feature 162 single-story homes and 74 two-unit duets (148 total dwellings).

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