Saturday, April 21, 2018
Business

Tampa Bay home builders are cautiously optimistic

Silent here for half a decade, the symphony sounded anew: blasting nail guns, beeping backhoes, the din of crews at work.

One morning last month, atop a tract of grassland the size of Gulfport, dozens of landscapers, roofers and decorators were finishing the nine show homes of Waterset's "model row."

Once quieted by the housing crash, this subdivision has roared to life. With plans for up to 6,000 homes, Waterset could become one of the largest "master-planned communities" opening this year in the country.

"It's time to get back to building new homes," said Rick Harcrow, a senior vice president for Waterset's developer, Newland Communities. "People are ready for that."

Record-low interest rates, rebounding consumer confidence and tightening supplies of resale homes are inspiring builders to get back to work after a bust in which the nation's new-home supply sank to a 50-year low.

Builders pulled more than 3,800 building permits for single-family homes in Tampa Bay in the first eight months of 2012, a 26 percent jump over the same period in 2011, U.S. Census data show.

"The builders I talk with are more confident and feel better than they have in the last six years," said local housing analyst Marvin Rose. "We've got a little momentum, and we hope it continues."

The growing swell falls far short of a new boom. Tampa Bay's 4,500 housing starts over the past year remain below the 1990s average of 7,500 homes a year, according to housing research firm Metrostudy.

The number of Tampa Bay construction jobs has grown since its record low this summer, but is still at one of the lowest points in the past two decades, and the workforce remains at half its strength from 2006, Bureau of Labor Statistics data show.

"We're building a fraction of what a normalized market would be," Metrostudy consultant Tony Polito said. "Housing performance is closely tied to the job market. This is a get-up-and-go-to-work town. Job growth is the biggest key."

• • •

Tampa Bay is sprouting new homes more quickly than several other Florida communities, with its 4,500 housing starts over the past year outpacing Jacksonville, with 3,300 starts, and South Florida, with about 4,000, Metrostudy data show. The younger Orlando market had about 5,000 starts.

The resuscitation of some of Tampa Bay's once-comatose subdivisions shows that builders are betting big on future growth, analysts said.

The Orlando-based developers of Avalon Park West, the Wesley Chapel subdivision where work stopped in 2005, recently restarted construction, with plans for up to 4,400 homes in 11 phases.

The nearby WaterGrass subdivision, which finished a full neighborhood before construction slowed, is planning about 2,000 homes. About 50 are under construction, with prices ranging from $159,000 to nearly $600,000.

"WaterGrass was an investment we had pre-crash, but it's not about us, it's about market demand," said Barbara Kininmonth, vice president of sales and marketing for Crown Community Development, based in Illinois. "The trajectory just keeps going up."

Waterset, the Apollo Beach community crafted by the developers of FishHawk Ranch, is being built at the epicenter of Tampa Bay's new-home growth, in south Hillsborough County.

Builders lured by large tracts of developable land started 1,250 new homes there in the past year, more than were started in Brandon and New Tampa combined, Metrostudy data show.

"The buzzword of late has been 'cautiously optimistic,' " said Jeff Thorson, regional president of William Ryan Homes, which has built nearly twice as many homes locally this year than it did any year during the bust. "I'd say it's probably a little better than that."

In a sign of a continuing buildup, the supply of large tracts of local land primed for new development has "almost disappeared," said Eshenbaugh Land Co. owner Bill "the Dirt Dog" Eshenbaugh.

Eshenbaugh expects builders will push further into undeveloped territory, in counties like Pasco, Hernando, Polk and Manatee, to load up on lots in advance of new construction.

"Those who bought (land) in '09, '10, a lot of people thought they were morons," Eshenbaugh said. "But history's going to prove that old tradition: The best time to buy is when no one wants to buy."

• • •

Housing analysts predict new construction will kick into higher gear next year, but builders still face a slew of challenges in recovering from the housing hangover.

Though firms have largely stopped building homes without buyers in line, older "spec" homes continue to haunt the market. About 40 percent of new homes, which include those previously built spec homes, are vacant. That's twice the rate of a healthy market, Polito said.

Banks are rebuffing prospective buyers with stricter lending standards, persuading many to rent after credit dings from short sales and foreclosures.

Developers and builders said they are tailoring their product to a new kind of buyer, recession-hardened and soured by memories of wasteland subdivisions, crumbling sales centers and other skeletons of the crash.

At Waterset, developers finished building the pool, gym, walking trails and clubhouse to "deliver the promise early" and stave off the uncertainty of Coming Soon signs, Harcrow said.

Builders there are also taking, as Newland marketing director Pam Parisi said, "smaller bites," with thinner lots and shorter construction phases in an attempt to guard against overbuilding.

Lennar, the Miami building giant that leads Tampa Bay's new-home market, launched a line of multigenerational "NextGen" houses, built with separate kitchens, bathrooms and front doors for in-laws, elders or college students returning home.

Lennar and other builders like Taylor Morrison are also offering free financial counseling to help buyers bump up their credit, secure a mortgage and close on one of their homes.

"We're out of the speculation business," said Dave Parker, director of sales and marketing for Lennar's Central Florida office. "We learned a lot of lessons, we retooled our business, and we figured out how not to waste. … We're simply going to take what the market wants and deliver."

Last month, Sherry Gibbs, 39, and her family moved from North Carolina into one of the NextGen homes in a south Hillsborough subdivision called Ayers­worth Glen.

Gibbs and her husband, Timothy, a government contractor, looked at several resale homes but found the prices too high.

Their new five-bedroom home in Wimauma, with a separate one-bedroom suite and garage for Gibbs' parents, cost them about $270,000.

"We got more for our dollar and paid almost $100,000 less" than similar resale homes, Gibbs said. "When we saw what we could get for less, to have a brand-new home no one else had lived in, that appealed to us."

Their home was finished in August, Gibbs said, and the family moved in Sept. 1. But they won't be the newest family on the block for long.

A home is under construction next door, and three more are being built across the street.

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

 
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