Friday, June 22, 2018
Business

Bay area's luxury real estate market bounces back in 2012

When Rob Gronkowski bought a new home in South Tampa, the New England Patriots' all-pro tight end did not exactly skimp.

His three-story manor in the tony Westshore Yacht Club boasted custom-built fish tanks, two remote-controlled fire pits and a casino-style security system. As part of the deal for the waterfront home, sellers included a 26-foot powerboat. Total price: $1.6 million.

But for all its grandeur, Gronkowski's mansion was a shack compared to the most expensive homes and condos sold last year across Tampa Bay. In fact, stacked against last year's priciest sales, it didn't even crack the top 100.

That's because 2012 proved to be a banner year for homes in Tampa Bay's most elegant extreme. Sales of homes, townhomes, condos and villas for $1 million or more grew 40 percent last year over 2011, Multiple Listing Service data show.

That's by far the biggest jump since 2005, when $1-million-plus sales doubled at the crest of the housing boom. After two years of modest bumps and four years of steep declines, the luxury market that was once so quiet seems suddenly back in style.

"The people we cater to, their dreams have not died just because the economy has become more challenging," said Bobby Gross, the co-owner of Windstar Homes, a Tampa boutique builder of multimillion-dollar homes. "Their options are much greater than those just struggling to get by."

Last year's growth in home sales and prices signaled good news for the average homeowner, too. But the broader market could not keep up with luxury real estate's rise. Sales of homes below the $1 million mark, MLS data show, rose about 10 percent.

Prices for the 330 estates sold for $1 million or more last year averaged about $350 per square foot, according to MLS. The database tracks Realtors' public sales; private listings tailored to elite buyers were not included.

The smallest of those high-end homes, a 1,200-square-foot cottage built in the 1930s on Pass-a-Grille Beach, sold for $1.4 million. The largest, Terry "Hulk Hogan" Bollea's 17,000-square-foot Belleair mansion, sold for $6.2 million.

Real estate agents said years of repressed demand, rebounding consumer confidence and record-low interest rates for jumbo loans helped pilot last year's high-end sales.

That 2012 was the year when local home prices bottomed also spurred wealthy buyers to jump at good deals. The year started slow, but as prices crept upward, agents said, buyers finally decided to take the plunge.

"For years we heard people say, 'We're going to wait until it hits bottom,' " said Smith and Associates Realtor Jeanne Wolfe, who listed the most expensive home to sell in Hillsborough County last year, a $5.2 million Davis Islands estate. "They realized, if they're still waiting for the bottom, their window of opportunity has passed."

The reasons behind recovery sound similar, regardless of the number of figures on the price tag. So why the big difference between the resurgence of high-end homes and the rest of the market?

The relatively small number of multimillion-dollar homes means small shifts in sales volume equate to big percentage changes. But agents also point to the obvious: International buyers, professional athletes, corporate executives and the rest of the rich and famous have fewer financial roadblocks and more room for risk.

It also doesn't hurt that this crop of buyers can afford to skip the slog of taking out a mortgage. More than 40 percent of last year's $1-million-plus sales, MLS data show, were all cash.

Tampa Bay was not the only place where palatial real estate stole the show. An Illinois couple who won $157 million in the lottery last April bought a $7.5 million mansion on Sarasota Bay.

But few places spotlight the top-heavy growth like Miami and its ultra-exclusive Indian Creek Island, where a private police force patrols the coast on personal watercraft, according to Forbes.

In March, hedge fund billionaire Eddie Lampert paid $38 million for a 17,000-square-foot villa on the island, scoring the priciest home sale in Miami history. His record lasted five months: An anonymous Russian buyer later paid $47 million in cash for a 30,000-square-foot mansion a few doors down, replete with its own auto showroom, recording studio and a private beach of pink sand imported from the Bahamas.

The boom for homes priced $1 million or above has echoed across the country, with sales rising 9 percent nationwide in the first nine months of 2012 to the highest point in four years, according to real estate data firm DataQuick.

Locally, the big money has landed in wealthy Tampa neighborhoods like Avila, Beach Park and Davis Islands, and on Pinellas County's coastal enclaves, like Tierra Verde, Belleair and Island Estates.

In some of those waterfront communities, agents have been surprised by buyers paying millions of dollars for homes only to tear them down and build anew. Martha Thorn, a Coldwell Banker agent who sold 13 $1-million-plus homes last year, said, "We haven't seen that in years."

But what to put in that big home? Agents say outdoor kitchens, his-and-hers home offices and "media rooms" with big screens and stadium-theater seating have joined infinity-edge pools as the luxury amenities to beat.

Buyers "want proximity to everything, easy access from work to home, four to five bedrooms and media rooms, three-car garages," said real estate agent Toni Everett, who listed four Tampa homes that sold last year for more than $2.5 million each. "And everybody wants water."

Local luxury home builders eagerly filling those requests say they expect high-end homes to show steady growth as the economy recovers. Some cite homes already in the planning or permitting phases as proof this year will continue the trend.

National builders and investors are similarly bullish that the luxury market is here to stay. Toll Brothers, the country's biggest builder of luxury homes, saw revenues and demand soar in 2012, leading its stock over the past year to jump 60 percent.

In a conference call in August, Martin Connor, Toll Brothers' chief financial officer, said, "It feels good to be making money again."

Drew Harwell can be reached at (727) 893-8252 or [email protected]

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