Thursday, October 18, 2018
Real Estate

Surge of home starts in Hillsborough, Pasco still can’t meet demand

APOLLO BEACH — Every weekend, scores of prospective buyers stream through the dazzling model homes at Waterset, admiring the high-end lighting, the glass-tile backsplashes, the plank-tile floors

For prices ranging from the $200s to the $800s, lookers can be owners in this huge master planned community, one of many in the Tampa Bay area in the throes of a construction boom.

Over the past 12 months, the number of new home starts jumped 16 percent compared to the previous 12-month span. In Waterset alone, 340 houses began construction as bulldozers and backhoes continued to transform one-time farm fields into what ultimately could be a community of 10,000.

Yet for all of the building in Hillsborough and Pasco counties, which together account for nearly 90 percent of home starts in Tampa Bay, the demand still remains greater than the supply — especially for moderately priced homes.

"We are still under-built because we can’t afford to build in the $180,000 to $200,000 price bank," says Tony Polito, regional director of Metrostudy, which tracks housing starts. "I could easily make a case for a couple thousand more units (to satisfy) pent-up demand."

RELATED COVERAGE: Throughout Pasco, new-home market is booming

Housing experts warn that this will be a tough year for buyers, particularly first-time and lower-income buyers. A shortage of existing homes has driven up bay area prices to a median of $230,000 although they can go much higher in popular neighborhoods close to downtown Tampa and St. Petersburg.

That has prompted more buyers to look at new homes in semi-rural, planned communities where they traditionally could get much more house for the money. But several factors are putting even those beyond the reach of many in a metro area where the median household income is still only $51,100.

"The rule of thumb is three times income, so most people would prefer to buy a $180,000 home," Polito says. "You just can’t produce that because of impact fees and land costs and construction costs."

The average price of a new home with lot is now about $315,000, he says.

Among the builders active in Waterset and other planned communities is Homes by WestBay. It started at a seemingly terrible time — 2009, while Tampa Bay was still reeling from the housing crash. But the Riverview-based company found an under-served niche.

"All new homes at the time were focused on entry-level building and we just really saw a need at a higher price point," says Willy Nunn, WestBay’s president. "A lot of our initial customers were military officers and health care professionals and that buyer pool has diversified as the economy recovered."

Last year, WestBay sold 440 homes in the bay area, generally at prices between $300,000 and $800,000.

"It’s become increasingly difficult to produce a well-located single family home under $300,000," Nunn says. Like Polito, he cites rising impact fees as a significant factor.

Counties charge the fees to cover the costs of adding roads, schools and utilities to accommodate the thousands of new residents. Fees in Hillsborough and Pasco add about $20,000 to the cost of each WestBay house, Nunn estimates.

The need for road improvements is particularly obvious in the Apollo Beach area, where residents of Waterset and nearby communities say it can take 30 minutes at rush hour to reach 1-75 just a half mile away. But from a builder’s standpoint, all of those new houses going up are assets, not liabilities.

"What frequently gets overlooked is that the typical $300,000 house is going to provide $4,500 in a perpetual real estate tax stream," Nunn says. "That a perpetual amount that’s turned over to the county from day one. Growth does pay for itself, I believe."

According to Metrostudy, Hillsborough’s share of the new-home market in Tampa Bay has soared to almost 60 percent. So much of the construction is in south Hillsborough that 600 more homes were built in just that area than in all of Pasco County over the past year.

But while south Hillsborough seems to have vast swaths of land still available for development — too much development, critics say — appearances are somewhat deceiving. Much of the land is outside the urban services boundary while only about 20,000 lots are within the area served by county water and sewer. At a time when 3,500 new homes a year are going up south of the Alafia River, all those lots could be built out by 2025.

"You’re nearing the end of development as we know it,’’ Nunn says.

He predicts WestBay will stop building in south Hillsborough within four or five years. In Pasco, with 50,000 developable lots remaining, the company might continue another 10 or 12 years.

Among the companies that have kept new-home prices relatively affordable is Texas-based D.R. Horton, the nation’s largest home builder by sales volume. Its average sales price in the Tampa Bay area is $235,000, and it offers homes with base prices under $200,000 in eight local communities.

Many of the homes are part of the company’s Express Homes brand, started in 2014 and geared to first-time buyers and baby boomers wanting to downsize.

"Due to our economies of scale and by offering less floor plans with fewer options — some of which are townhomes — Express Homes provides buyers an affordable entry into home ownership," Darren Saltzberg, division president of D.R. Horton’s Tampa division, said in an email.

**

In terms of housing starts, the most active community in the Tampa Bay area is Waterset, on Big Bend Road just off U.S. 41.

Master-planned by Newland Communities, which also developed FishHawk Ranch in Hillsborough and Bexley in Pasco, Waterset sprawls over 3,100 lake-dotted acres landscaped with magnolias, maples and palms.

Amenities include a cafe, pool, fitness center, playgrounds and dog parks. This summer, the Waterset Club will open with two more pools, water slide, game room, tennis, basketball and pickle ball. There are three schools: two for preschoolers, the other K-through-5.

Just over 1,400 families now live in Waterset, but two new neighborhoods with about 500 more home sites will open this year. Current plans call for 3,600 homes — including townhomes and villas — with future phases still being designed.‘

About half the homes sold last year were between $250,00 and $350,000, Pam Parisi, Newland’s vice president of marketing, said in an email. "We strive to offer a variety of home styles and price ranges to meet consumer demand," she said.

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On a recent Sunday, Suzanne and Keith Buchman were looking at models priced at $300,000 or less. Now living in Hershey, Pa. they are considering a move to the Tampa Bay area — she’s a medical aesthetician who "can go anywhere" and he’s in a pharmaceutical business with reps in the area.

The two, both 50, already had stopped in Pasco at Starkey Ranch, which they liked, and Bexley, which they preferred. They had heard that schools are better in Pasco than in south Hillsborough but since they don’t have kids that isn’t a factor.

Suzanne liked the feel of the Apollo Beach area. "This is more coastal," she said. And they ranked Waterset with its bountiful amenities No. 1 among the Tampa Bay planned communities they had seen so far.

But what made the greatest impression wasn’t anything in this area. On the way down from Pennsylvania, they had stopped at Margaritaville, the new Jimmy Buffet-themed planned community in Daytona Beach.

"Is there going to be a Margaritaville here?" Suzanne asked eagerly. "We’d take Margaritaville in a minute."

RELATED COVERAGE: Real-life Margaritaville wows parrothead retirees

Contact Susan Taylor Martin at [email protected] or (727) 893-8642. Follow @susanskate

     
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