Tuesday, August 21, 2018
Business

As Tampa Bay home prices and rents climb, townhomes are becoming all the rage

When CalAtlantic Homes began selling its new townhouses off Tampa's Hillsborough Avenue in August, it knew it had one big marketing advantage over a nearby apartment community.

There, a three-bedroom unit rents for at least $1,800 a month. But in CalAtlantic's Jackson Square, a three-bedroom townhome can be bought for just $1,587 a month.

"You can own a really nice townhome in a nice gated community in a really great area for less than you can rent,'' says Dave Bulloch, CalAtlantic's Tampa division president.

It's a powerful pitch, even if the monthly payments are more comparable to rents once you factor in insurance and taxes. So far, three have been sold and six more are under contract.

As rents and single-family home prices continue to climb in the Tampa Bay area, townhomes are enjoying a surge in popularity among builders and buyers. In the 12 months ended in June, the number of new townhomes starting construction soared 54 percent compared to a year earlier. From South Tampa to downtown St. Petersburg to suburban areas like Wesley Chapel, new townhouses went up at twice the rate of single family homes.

One reason for townhomes' appeal?

"It's the entry-level price point,'' says Tony Polito of Metro Study, which tracks housing starts in the bay area. "The average new home is over $320,000, the average closing price for a townhome was $224,000. It's almost $100,000 less.''

Previous coverage: The rent in Tampa is getting more expensive faster than anywhere else in Florida

But with some waterfront townhomes selling for over $1 million, price isn't the only factor. Townhomes also are drawing greater interest because of their roominess compared to apartments, and their low maintenance compared to single-family homes.

"It's the professionals that just don't want to have yard space and all that yard work,'' says Cynthia Ryan, the agent for six townhomes near Gandy and Westshore boulevards in Tampa. Seventeen more are planned for the same street.

Townhomes differ from condos in that they are individual houses, typically two stories high, built side by side with one or two shared walls. Unlike condo dwellers, townhome owners hold title to the land beneath their houses; like condo dwellers, they pay a fee for maintenance of common areas such as community pools.

As U.S. cities grew in the 19th century and open land became scarce, townhomes provided an attractive alternative to single-family houses. They fell out of favor in the prosperous years after World War II when millions of Americans bought cars, moved to the suburbs and settled into bigger, detached houses with garages. But the renewed appeal of urban living is again boosting interest in townhomes.

Previous coverage: How long can the good times roll for Tampa Bay's housing market before the bubble bursts?

Texas-based D.R. Horton, which calls itself the nation's largest home builder, opted for a townhouse project when making its first foray into Pinellas County. It is building 130 townhomes on the site of a former mobile home park off Fourth Street N, just a few miles from downtown St. Petersburg.

"While performing our market research, we consider the location, desired price point and current area demand,'' said Marissa Ann Awtry, a Horton spokesperson. "We determined townhomes would provide the best new housing option for the area.''

So far, more than a third of the homes have been sold, and about 20 are occupied. When the project was first announced, prices started in the high $200,000s; they have since risen above $300,000.

Townhomes are going up even closer to St. Petersburg's thriving downtown, some in areas considered iffy just a few years ago.

In 2013, Contractor Jeffrey Hirschberger bought several lots on Highland Street N where another builder's plans for the property had been dashed by the housing crash. A busy one-way street, Highland faces the back of a Walgreen's and an Ace Hardware, and runs by a tiny park where police have responded to numerous calls about vagrancy and drug activity over the years.

But Hirschberger overlooked Highland's drawbacks and saw potential in its proximity to downtown and the many shops and restaurants on Central Avenue a few blocks to the south. Of the 16 Highland Townhomes he built, 14 have sold, at prices as high as $343,000.

"People say we've affected the neighborhood'' for the better, Hirschberger said, noting that several new single-family homes have gone up nearby while owners of older houses are painting and renovating.

Previous coverage: When it comes to home prices, Tampa Bay's cities are a bargain, study finds

This summer, Dr. Scott Kapulskey and his wife, Cindy, moved from a St. Pete Beach condo into a three-bedroom Highland townhome with small private courtyards in front and back. They like having space for their dachshund, Rudy, and a bedroom for Cindy's daughter, Lauren, who is living with them until she starts school to become a physician's assistant.

The area's once dicey reputation didn't faze them.

"My wife raised her children in (St. Petersburg's) Old Northeast and she saw the gradual revitalization of St. Pete in general,'' said Kapulskey, a geriatrician. "This is a sound investment although it was more about the lifestyle we would lead, the ability to ride our bikes to the Saturday market and be able to take part in all those thing that have grown there in downtown.''

Stairs can be one obstacle to townhome living, especially for older buyers. That was on developer Michael Cheezem's mind as he planned his new condo and townhome community, Belleview Place, on the site of the former Belleview Biltmore hotel in Belleair.

"We're putting a master (bedroom) downstairs on our larger townhomes and on smaller homes we're providing an elevator as a standard option,'' Cheezem said. "We're selling primarily to empty-nesters so having an elevator was a very important feature.''

Throughout the Tampa Bay area, 46 subdivisions had at least six new townhomes underway in the 12 months ended in June, Metro Study found. For big homebuilders like CalAtlantic, townhomes are a way to compete with the rental market, which has swollen since the housing crash.

At Jackson Square, off Hillsborough Avenue near Oldsmar, CalAtlantic is building 42 townhomes behind a high-end apartment complex. The company touts the fact that its homes have garages, more square footage than the apartments and are a bit closer to Upper Tampa Bay Park with its walking and bike paths.

The biggest lure, though, are prices starting at $231,900 with monthly principal and interest payments under $1,600. And, CalAtantic hopes, buyers will be so happy with its Jackson Square homes that one day they might move up to its bigger houses — like those going for $1 million in its Estancia community in Wesley Chapel

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

     
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