INDIAN SHORES — Developers encouraged by low inventory and rising home prices will begin construction on the first multiunit housing projects in Indian Shores since 2006.
Georgia-based builder Ashton Woods Homes plans to construct 54 three-story townhomes at the property formerly occupied by the Hungry Fisherman restaurant at 19915 Gulf Blvd. Prices for the units are expected to start in the high $300,000 range.
"As you can imagine based on the location, the phones are ringing off the hooks," said Mike Roche, Ashton Woods' vice president for sales and marketing for Florida.
Home prices are increasing at a healthy rate and buyers who were in a position to buy during the recession, but were cautious, are starting to wade into the market, Roche said. "It's fun to see things turn around. … All of our communities are seeing good traffic."
The privately held developer is on track to sell roughly 60 percent more homes in Florida this fiscal year compared to last, Roche said. The builder is also developing 25 single-family homes in Bradenton and is starting to expand into Sarasota.
The Indian Shores project, on the Intracoastal Waterway, will be the third attempt in recent years to build condos on the property. In 2008, a 63-unit project by developer Atlantis West that would have spanned the boulevard was shelved due to site planning issues and concern over the economy. A backup plan to build a 150-unit retirement community also failed.
Local restaurateur Steve Westphal has received approval from the town to build five luxury condominiums, named Pinnacle of Indian Shores, at two lots at 20254 Gulf Blvd. Each of the 4,000-square-foot condominiums will occupy a single floor in the building, offering "360 degree views" of the Gulf and Intracoastal Waterway, Westphal said. Prices will start at around $1.4 million.
"A lot of folks have been sitting on the sidelines with their dollars," Westphal said. "There's pent-up demand."
"The interest is there," he said. One of the five units has already been reserved, according to the development's website.
Westphal has owned the southern half of the proposed development, now occupied by a three-unit beach rental property since 1970. He acquired the northern section in 2012.
"Housing is back!" said Ed Hahn, a Realtor at Gulf Beach Realty in St. Pete Beach and 13-year veteran of the Pinellas beaches market, referring to a recent cover of Money magazine. "This season is a record season for the hotel business, and my real estate business has been very good," he said.
Financing has gotten tighter, but for the kinds of buyers looking for beachfront property, it's available, he said.
"When you're looking at million-dollar condos on the Gulf, you're looking at millionaires anyway." Still, a large portion of Hahn's recent sales have been cash deals, or cash equity, he said, many to Canadians and wealthy second-homers from the North.
The toughest financing is for so-called "condotels," Hahn said, condominiums in buildings that allow short-term rentals, often managed by a third party. But for investors with cash, those properties are "better than money in the bank at half a point" of interest, he said.
Hahn warns against reading too much into a rebounding real estate market, however. "I would say, to the degree we're putting in permanent condominiums, it's good for stability," Hahn said, "but it doesn't add a lot to the tourism industry."
"What really drives income here, how people live, is off tourism," said Hahn, who also operates the gift shop at the Grand Plaza Hotel in St. Pete Beach. People who live in the area three or four months out of the year don't spend money in the local economy the same way vacationers do, he said.
Overall, "I feel the economy is getting better," said Westphal, who said his four local restaurants, including Parkshore Grill in downtown St. Petersburg, are having the best increases in business in years. Soon, Westphal will also open a fifth, the Gulf Grill, in Madeira Beach.
Indian Shores Mayor Jim Lawrence says he is happy to see development but after weathering the entirety of the boom and bust as a town council member, he is reluctant to declare the return of the real estate market. But, the projects are "going to mean a lot for the town's tax base, that's for sure," he said. "We've lost so much in the last five years."
In 2007, the town's taxable property value was assessed at $1.08 billion. This year, it was assessed at $618 million, though the losses have slowed dramatically with the town losing less than a fifth of one percent of its value since last year.