IRVINE, CA-Eight land sales that have closed recently for a total of $39 million and 335 acres indicate that buyers and sellers have adjusted to the new reality of the marketplace, says a broker involved in the sales. "While the land market has changed, buyers and sellers have finally adjusted to the reality of current market values. Land values have reset to 2003/2004 levels,” says Les Whittlesey of Irvine-based Whittlesey Doyle, which had the exclusive listings in seven of the eight sales, four of which were REO sales.

According to Whittlesey, co-founder and principal of the firm, one of the most interesting aspects of the transactions was their diversity. "At one end of the spectrum, we sold a graded super pad site in Temecula to a builder for a project that will open for sales next year, and, at the other end, a raw un-entitled land site sold to an investor doing an assemblage in the Banning market," he said.

Whittlesey says that investors have entered the market for the same reason as builders: “They want to buy entitled land so part of the 'heavy lifting' has already been completed. Their plans are to purchase, hold the property and then take it to the market at the appropriate time." Finding developed lots is difficult because of how long it takes to get through the entitlements and the development process.

Regarding REOs, Whittlesey says that many of the banks have already sold their residential land REOs, but there are still some bank-owned properties on the market and still more to follow, but not as many.

Following are the eight deals that closed:

In San Bernardino County, Whittlesey Doyle negotiated the sale of three land transactions, among them the REO sale of a project called Cordoba that consists of 135 finished lots for single-family homes plus three finished units. The 35.5-acre property at the northwest corner of Hook Boulevard and Cobalt Road is part of the West Creek Specific Plan, which covers approximately 406 acres proposed for mixed single-family residential development of nearly 1,600 homes. Nick Emsiek represented the seller, a financial institution, in the sale to a private investor.

In Rancho Cucamonga, Mitch Perez represented the seller of 81 finished lots on 35 acres in Ironwood Estates at Wardman Bullock Road and Colonbero Road. The buyer was Meritage Homes. The seller was Rancho 2004 LLC.

In Fontana, Perez also represented the seller, a financial institution, in the REO sale of 76.15 acres in the northern part of the city. The unimproved property is immediately west of the future 531-acre Arboretum, a Lewis master-planned community, which proposes 3,526 residential units, two school sites, public and private recreational facilities. The previous developer had a proposed plan for 720 attached and detached residential units on 63.22 acres. The remaining acreage is zoned for commercial. The buyer, Lewis Investment Company LLC, closed in two days after a two-week due diligence period.

In Riverside County, Whittlesey Doyle negotiated the sale of three land transactions in the last 60 days. In Temecula, Les Whittlesey and David Harbour represented the seller in the sale of improved lots for up to 271 detached and attached units at Maravilla at Rancho Highlands. Located in the heart of Temecula on the west side of Ynez Road about a 1/4 mile south of Rancho California Road, Maravilla consists of a recorded Final Map, which separates the 21.06-acre property into three condo lots for development. A development plan for 210 townhome units in a triplex configuration was approved by the city of Temecula in May-06. Rough grading was completed and all major backbone infrastructure including sewer, water, storm drain, dry utilities and streets with curb and gutter are installed. The buyer was Woodside Homes. The seller was American Property Enterprises. According to Whittlesey, Woodside Homes is expected to open for sales next year.

In Banning, Perez represented the seller in the sale of Rolling Hills Estates, 140.7 residential acres. The property currently has no active entitlements; however, it had previously been approved for 213 residential lots with a minimum size of 20,000 square feet. The buyer was Diversified Pacific. The seller was Banning Homes LLC.

In La Quinta, Whittlesey Doyle represented a financial institution in the REO sale of 29 finished lots and 15 completed homes located within the community of the Estates at Point Happy Ranch, a 22-acre private community with a gated entry. The project is located at the northwest intersection of Point Happy Way and Washington, just south of Highway 111. The buyer was RCS-Point Happy LLC.

In San Diego County, Steve Relth of Whittlesey Doyle recently negotiated the sale of two land transactions, both in the City of Escondido. Relth represented the buyer in the sale of City Square in Escondido, which included six building pads for 84 townhome units of 1,183 square feet to 1,933 square feet on three acres. The project is at the southwestern corner of Second Avenue and Orange Street. The buyer and seller were undisclosed.

Also in Escondido, Relth represented a financial institution in the REO sale of El Norte Parkway. The 1.67 acres includes tentative map approval for eight-row homes averaging 1,950 square feet and 12 condominiums of 1,630 to 1,715 square feet, plus three existing rental units in Escondido in northern San Diego County. The property is located at the southeast corner of El Norte Parkway and Broadway. The buyer was Community Housing Works.

Commenting further on the deals, Whittlesey says, “We have seen builders who stopped buying land two to three years ago, enter the market to refill their land positions." said Whittlesey.” His firm expects home values to remain flat for the next couple of years due to the foreclosure market and job outlook, but home values may soften in the short term until people feel that there is some positive news about the economy.

“Land prices will rise when land buyers feel the market has stabilized,” Whittlesey continues. “When there is a more positive outlook on the residential market, builders don't require as high of a margin since they feel that there is less risk involved. Less risk equals lower margins which means higher land values."

Since there has been no land development in the past several years, “We see tremendous upside once the foreclosure market runs out of gas and the economy has stabilized," the Whittlesey co-founder says. "In the meantime, there will not be much inventory starting in 2012, which will lead to a tightening of the land market, resulting in increased values."