San Diego Business Journal

An Encinitas developer is planning a Carlsbad housing development of $2 million homes in a real estate market that is seeing soaring demand for higher priced homes.

“The coastal housing, from our perspective, is structurally under-supplied,” said Greg Drakos, managing partner of Cross Real Estate Investors.

“There’s very little new product coming to market,” Drakos said.

Cross Real Estate Investors in November acquired a nearly 1.3-acre site at 2908-2924 Highland Drive for more than $2.9 million.

The firm plans to build five ocean-front single-family homes on the property at 2908-2924 Highland Drive with lot sizes averaging 10,000 square feet, Drakos said.”

Minimalist Style

Although still going through permitting, tentative plans call for the homes to run from 3,000 to 3,500 square feet with a built-in granny flat, also known as an accessory dwelling unit, of about 800 square feet.

“You’re looking at probably a four-bedroom, four-bathroom main house and potentially a one-bedroom, one-bathroom ADU,” Drakos said. “We’re looking to do, call it a modern beach cottage design that integrates a minimalist, almost Scandinavian type flavors.”

The homes also will have space set aside for surfboards “and outdoor equipment that really aligns with the lifestyle of Southern California,” Drakos said, adding that the homes will be “warm and comfortable and usable but minimalist – not feeling very cluttered.

The homes would be priced at “$2 million, give or take,” Drakos said.

Cross Construction, an affiliate of Cross Real Estate Investors, will be the general contractor. An architect hasn’t been selected.

Pending permitting, Drakos said construction could start within 10 to 12 months with the first house completed in an additional eight months.

“We think our market is either a move-up buyer or anyone looking for a family compound, more space,” Drakos said.

The Market

The demand for homes in the price range that Cross Real Estate Investors plans to build has spiked, according to Carla Farley, president of the Greater San Diego Association of Realtors.

Homes priced at $1 million or more have seen the biggest jump in sales, Farley said.

In the last four months, sales of higher priced homes have gone up by about 30%.

“Carlsbad, La Jolla, places like that are having a record number of sales,” Farley said. “We’ve got a lot of cash sales coming in, even at those prices.”

Often, the pricier homes are going to people from beyond San Diego County who want a second home.

The rush to buy property that has marked the months since the COVID-19 pandemic has continued unabated, although Farley said she’s seen appraisals in some homes coming in lower than what sellers were seeking.