To test the theory that housing location is more important than ever before as the cost of gas continues to go up, I called Tim Hernandez and Kevin Rickard, principals of South Florida-based New Urban Communities, an infill builder with six projects in Palm Beach County and one in Boward County. They told me there is light in the tunnel. "We sold eight houses in January and three in the first week of February this year, at an average price of $300,000," said Hernandez, "compared to zero sales in both months a year ago." He said traffic was also way up. "We counted 172 traffic units in January this year in seven projects, compared to 77 units, in nine projects in January of 2007."
It's nothing like 2005, Rickard said, when New Urban "once sold 100 homes in a single day. We had people standing in line to write us a check." But right now, any positive sign in South Florida is a revelation. Palm Beach County was ground zero for the investor-driven feeding frenzy in 2005. New Urban's business model stresses small Traditional Neighborhood Design (TND) infill projects near shopping, restaurants and employment centers. If commuting costs really are a concern, this is one company that should benefit. Right now, Hernandez and Rickard are kicking themselves that they have no spec inventory. It has to be a positive sign for 2008 when a builder in spec-ridden South Florida laments a shortage of spec homes.Blog reader Sarasota Communities replies:
This once again concurs with a trend toward mix-use lifestyle living. People are deviating away from the sprawl and crawl that is becoming more inconvenient and costly with commuting. Urban amenities are sensible. Townhomes and villas are now priced affordably in the Sarasota area, and I am seeing the national builders with little inventory on the townhome product. A plethora of single-family homes are on the market and buyers are migrating toward maintenance-free quality of life, especially the foreign investor and baby boomer. Re-adaptive use, lifestyle town centers and mix-use neighborhoods are slowly trickling into our Sarasota/Bradenton landscape, and it couldn't be better timing.
HOUSTON STILL STRONG
David Jarvis, director of the Houston division of MetroStudy, the Houston-based real-estate research firm, predicts home price appreciation of 5 percent over the next two years in that city's huge housing market, driven by strong job creation in the energy industry. Houston has added more than 75,000 in the past 12 months.
Steven Kleiman, CEO of Oakington Realty — a boutique realty firm that handled more than $40 million in high-end home transactions in 2007 — says high-end homes are driving the Houston market and location is more important than ever. He cites a trend for buyers looking for "suburbs in the city." "They want to be close to where they work, yet within close distances to amenities such as parks, country clubs ... restaurants and first-class shopping centers," he says.
Chalk this up as more anecdotal evidence of several trends that seem to be developing: (1) That state's energy-driven economy is too strong to falter for long; (2) The mortgage industry debacle is hurting the affordable, entry-level segment of the market (not just in Texas, but everywhere); (3) There's a lot of pent-up demand in the luxury end of the pricing spectrum; and (4) Infill of luxury homes on small lots in prestigious locations close to offices, shopping and restaurants are hot right now — and will be hotter as the market comes back.