A low basis on the property enabled the development of a product that can compete with the foreclosures and short sales that have dominated the Florida landscape for the past several years.
Palm Coast, FL – May 16, 2011 – In this day and age of gloom and doom espoused by everyone from Ben Bernanke to your local postman, it’s time for some good news in the housing industry. And believe it or not, there is good news to be told.
From ad agencies to flooring companies and roofers to developers, a lot of people in this great state of ours made their fame and fortune riding the real estate wave in Florida. And when the wave crashed – and crash it did – many were forced to do things they had never contemplated before in order to survive: shrink down, pull back, wring their hands and wait for better days to come.
Better days are here.
Mike Castleman, founder and CEO of Metrostudy, recently noted in Fortune magazine that in the 41 cities Metrostudy covers, just 78,000 houses are currently vacant, for sale or under construction, representing a quarter of what was available in 2006 and well below the level of a decade ago. That, plus the steep decline in pricing, he says, will lure Americans to start buying homes again, which will result in prices rising.
While it might be a bit premature to herald the end of the national housing slump, in our little microcosm of the universe, things are picking up. Two new projects located in different markets of the state are defying the downward trend in new home construction and launched brand new communities in 2010, while others with existing projects are reporting impressive sales figures over that of last year.
So what’s their secret? Good business sense, good timing, and a lot of hard work.
|Construction is booming in Monterra, located in Cooper City, with sales of over 250 homes since debuting in 2010.
Take for instance, Monterra, located in Cooper City, just east of Fort Lauderdale, Consisting of 500 acres of prime real estate, this property represents the largest undeveloped parcel in Broward County. Upon completion, the primarily single-family home community will welcome 1600 families through its gates.
Developers Jim Carr and Armando Codina purchased the property after Hollywood-based home builder Tousa went bankrupt. They did so through an acquisition that included the Community Development District (CDD) bonds, the land backing those bonds and the mortgage on the property. A low basis on the property enabled the 30-year veterans of the home building industry to develop a product that can compete with the foreclosures and short sales that have dominated the Florida landscape for the past several years.
Since launching the project in January of 2010, more than 250 homes have been sold with average weekly traffic of 300 people.
|Central Park by Neal Communities has sold over 100 homes since its debut in July 2010.
On the opposite side of the state in Sarasota, Neal Communities’ new project – Central Park – took the area by storm in July of last year when it launched a single-family home community surrounding a large, family-oriented park setting. With initial pricing from just $120,000, it is of little wonder that opening weekend generated traffic heralding days of old with more than 4,000 people visiting the project in a single weekend.
Since that time, over 100 homes have been sold with average traffic of nearly 60 people per week.
Interesting enough, it’s not just entry-level buyers heating up the market. A number of national news articles – from the Wall St. Journal to the New York Times – report increased activity in the luxury market as well.
Dick Corace, CEO of Moraya Bay Development Co. and 30-year developer in the Naples market echoes this sentiment. “Even though the economy has extended market absorption, mid-term elections and the extension of the tax cuts have helped us here (at Moraya Bay).”
The project, comprised of 72 high-end residences overlooking the Gulf of Mexico, launched sales in 2006 selling out very quickly. However, most of those contracts fell through at closing and the developer was forced to go back to the market with lower prices and a new brand.
But it’s paid off in spades, with over $80 million in sales since January of 2010. “We’re seeing improvement across the state of Florida,” Corace said. “But it will be at a slower, more measured and sustainable growth rate.”
|Sales in Vineyards this year are strong with much of the activity taking place in the estate home neighborhood of Venezia Grande.
Just down the road, Vineyards, a large master planned community which debuted in Naples in 1987, sold more product in the first 60 days of 2011 than they did during the entire year of 2010. Many of those sales were in higher end luxury estate homes.
With all the bargain shoppers out there, one might find the heightened interest in luxury homes rather amazing but Michel Saadeh, Vineyards’ Development Corporation president and CEO, is somewhat more practical. “Look, the stock market has gone up, the economy is recovering and there’s not going to be a double-dip recession. This is a great to time to buy. Things are super cheap, interest rates are low and it’s not going to last forever.
“It’s often cheaper to pay a mortgage these days than rent,” he added. “That, plus fewer short sales and foreclosures mean good things for the housing industry.”
But as seasoned veterans of this industry, the lessons of the past four years have not been lost on them.
“I’ve been doing this for 30 years and no matter how good things may be going, you can never be complacent, never lose your edge and always be optimistic,” Corace said.
Truer words have never been spoken.
Robyn Bonaquist is president and CEO of B-Squared Advertising, a full-service, award-winning, advertising and marketing agency located in Naples, Florida serving builders and developers throughout the country for over 10 years.
Source: FHBA.com – reprinted with permission