HBWeekly

Large Commercial Projects Spur Daytona Beach Renaissance

Posted on June 3, 2015 by Wendi Wilkerson

HBW subscribers in the Daytona Beach area already know that the commercial construction boom is almost more than the city’s GC’s can handle. The $400 million Daytona Rising project has drawn businesses back to the area in a big way. The renovation of the Daytona International Speedway and the inclusion of Trader Joe’s distribution center nearby have been big stimulus anchoring the commercial rebirth of Daytona Beach.

Gordy Lloyd, VP with the Daytona Beach-based Haley Construction firm which is GC for many of the new projects, says that Daytona Rising is a renaissance of sorts. “What they have done is bring attention back to Daytona Beach to what it used to be,” he says, and all the attention has had a ripple effect in the area. Haley is nearly finished building the Cheddar’s Casual Cafe in front of Voluisa Mall, which joins the Outback Steakhouse, Bahama Breeze, and Olive Garden restaurants Haley has recently built along International Speedway Boulevard.

Roy Akins of Adams, Cameron, & Co. Realtors notes that “one of the benefits to getting something like a Trader Joe’s is that it attracts smaller businesses to take advantage of what the bigger guys see in the market.” Small restaurants, commercial spaces, and retail projects have gravitated into orbit around the new Trader Joe’s store.

Volusia County is one of the increasingly rare counties in Florida where land is still available and affordable, as compared with Tampa, Orlando, Miami, and Jacksonville. Volusia’s current and planned commercial projects include Wawa convenience stores with gas pumps near Port Orange and Orange City, Daytona International Auto mall, hotel construction and renovation projects, and apartment buildings in Daytona Beach and DeLand.

As it turns out, all of this development frenzy follows on the heels of significant population growth. Volusia County recently breached the half-million resident mark. Ted Lightman of Charles Wayne Properties says that “We are definitely seeing demand increasing, primarily along the main thoroughfares of Dunlawton Avenue, International Speedway Boulevard and Granada Boulevard.” Businesses are keen to move to the area he adds, saying that “the national and regional tenants want to be in those corridors and are willing to pay to be there.”

The nation’s economic recovery has driven local recovery in Volusia County, which has brought a wave of new residents and commercial construction. With employment and population climbing in the area, the county will probably experience more growth in the commercial construction activity over the next few years. The $800 million One Daytona mixed-use development near the Speedway, the $100 million Tanger Outlet Mall and the hotly anticipated $140 million Hard Rock Cafe are expected to break ground soon.

HBW serves builders in Florida, Georgia, Alabama, Texas, and Oklahoma. In addition to our Building Trend Activity for Residential Construction Reports, HBW can create a number of custom reports for any need you might have. We also offer exclusive White Paper Reports to help you market your business. White papers start by giving an overview of the trends in your area and then advice on how to turn your weekly building permit information subscription into successful business leads. To show you how we can help your business succeed, HBW is glad to provide you with complementary building data report or one of our specialized White Paper Reports. Contact us today and start making your business more profitable!

West End Marketplace May Become Office Space

Posted on June 1, 2015 by Wendi Wilkerson

HBW subscribers in metro Dallas will be excited to learn that the landmark West End Marketplace in Dallas is now under consideration for an office space renovation project catering to tech startups and small businesses. Plans to convert the space into a hotel or residence have fallen through, but this new round of development looks likely to pay off.

Granite Properties is under contract to renovate the 113-year-old property. Granite COO Greg Fuller says that the firm will close within the next few months and “renovate it with new systems and restore it to its historic relevance in the marketplace.”

The 8-story, brick and frame building was built in 1902 for the Brown Cracker & Candy Company, which at the time was the largest confectioner in the Southwest and employed more than 1,000 people. In 1986, the renovated site was opened to the public as the West End Marketplace, which was Dallas’ first festival marketplace retail center. The 10-screen cinema complex, interior atrium, and Planet Hollywood restaurant were added later.

Eventually, businesses began to lag, which led to the closing of the cinema in 2000 and Planet Hollywood in 2001. The Entire property closed in 2006, since which time the building sat vacant.

Granite, one of the largest and most profitable developers in North Texas, operates out of its Uptown office tower but will relocate to the Granite Park office campus in West Plano next year when the development is completed. If Granite follows through on its plans to renovate the building, the project will be another investment into reviving Dallas’ fin-de-siècle warehouse district.

At Houston Street and Ross Avenue, Farifield Investment Company is currently building a 267-unit apartment project for the rental market. The historic Landmark Center office building, located nearby at at Ross Avenue and Lamar Street, is also being remodeled.

John Crawford, CEO of neighborhood economic development group Downtown Dallas, Inc., says that the Granite’s contract “is an enormous step forward for downtown and the West End” Granite is a “quality developer” with a proven track record and Crawford is confident that the firm “will make the right changes to raise the profile of this neighborhood and lay the groundwork for other redevelopment in the West End.”

Austinites Protest Building Code Restrictions on Accessory Housing

Posted on May 28, 2015 by Wendi Wilkerson

Austin has been feeling a housing crunch for the past few years now, and as the tech explosion continues to bring transplants to Austin, it’s only getting worse. Many homes in Austin feature “accessory dwelling units” (ADUs)—also known as granny flats, mother-in-law units, garage apartments—or have room to add one.

Property owners and potential renters alike see these dwellings as a potential solution to the housing crisis. Unfortunately, the city’s restrictive municipal building codes are preventing accessory structures from being built at a pace that could help resolve the crisis.

According to the City of Austin, ADUs are small dwellings that share a lot with a larger residence. The code allows for ADUs of up to 850 square feet to be built on lots no less than 7,000 square feet by right, of on lots of 575- square feet if the neighborhood allows them.

But the code also stipulates that a nine-foot driveway plus off-street parking space be made available for the ADU resident, and that the units be located a particular distance from frontage, setbacks, and the primary dwellings. These are difficult to accomplish in older neighborhoods, and can cost would-be landlords a small fortune.

In June of last year, the Austin city council passed a resolution that would make it easier for people to build ADUs on their property. The measure seeks to relax the regulatory barriers to construction for ADUs that are 500 square feet of less in size. Unfortunately, nearly a year has passed and the planning commission has yet to pass the proposal. This holdup has left Austin property owners very frustrated.

Andrew Elder is one of those frustrated Austinites. He wishes to build an ADU in the backyard of his 9,000-square-foot lot so that his mother can live near the family. Later, the unit will be occupied by his developmentally disabled daughter so that she can be close but still have some independence. The unit will be metered separately but will be built immediately up against their home’s rear wall in a style that matches the main home.

Unfortunately, the city codes do not allow for this. The current code stipulates that ADUs be at least 15 feet from the primary home of 10 feet from the back of the property line. Although the lot size is mch larger than necessary, the layout of the Elder family’s lot leaves a tiny five-foot-wide area within which to build a living space.

Elder says that he would have to “pave over our garden, pave over our yard, our water tank… all of the things that we try to do make this a sustainable household… would have to be torn out in favor of a driveway,” even though his mother and his daughter do not drive and the street has plenty of room for on-street parking.

Austinites like Elder have recently begun circulating an online petition that will be presented at the next city council meeting. They hope to get the issue on the agenda so that it can be resolved.

Poor Water Quality Wrecks Florida Property Value

Posted on May 27, 2015 by Wendi Wilkerson

Red algae bloom threatens the coastlines of Lee and Collier counties, causing rental and investment revenue to plummet.

A recent report by the Florida Realtors organization found that discolored coastal water can suppress property values and even force homeowners to sell at a loss. Property values in Lee County were suppressed by almost $1 billion each year because of the poor coastal water quality.

Lee County property values plummet due to bad water. Photo courtesy of Caloosahatchee News Press.

Improved coastal water would increase property values in Lee County by over $500 million, with property values in neighboring Martin County likely to jump $428 million. The Lee County Appraiser’s Office reports that a $500 million increase in property value has a taxable value of $54.6 billion, which would generate $9.2 million in property taxes annually.

The report identifies smelly, toxic, red algae blooms as the main culprit in a chain reaction of poor water quality. “What is happening is that, while one algal bloom is not alarming in isolation, the recurrence of the algal blooms on a regular basis is showing up in the one-year models,” it says, “This regular recurrence is what is concerning home buyers and sellers. That is, a one-time event may not have a detrimental effect, but multiple times is a big problem.”

Red Algae at Fort Myers Beach. Photo Courtesy of Lee County.

The major contributor to the red algae blooms is excess phosphorus and nitrogen from over use of lawn fertilizer have washed into the coastal waters from the local Caloosahatchee watershed. Water from the Lake Okeechobee discharge also carries excess phosphorus and nitrogen that gets swept into the coastal estuary. Red algae feeds off of the excess chemicals and releases toxins in the water that cripple the estuary, kill thousands of fish, scare off tourists, and force health officials to close beaches.

A secondary contributor in the poor water quality is the phosphorus-eating cyano bacteria Lyngbya, which clumps onto sea grasses and chokes off the oxygen supply to the roots, killing the grasses. Dead grass washes up from the estuary bottom and onto the shoreline in massive, gooey clumps and releases yet more algae-lving nitrogen into the water. When algae and lyngbya are blooming, water visibility maxes out at a paltry six inches. Cloudy, clumpy water degrades property values.

Algae in Fort Myers. Photo courtesy of Earthjustice/John Cassani.

Researchers began the study last summer, only finishing their field work earlier ths year. All of the waterfront homes along the Caloosahatchee River at Franklin Lock and Dam to San Carlos Bay near Fort Myers Beach were surveyed. Report findings state unequivocally that “what was clearly found was that the ongoing problem of polluted water in the Caloosahatchee and St. Lucie rivers and estuaries has indeed resulted in a negative impact on home values.”

Locals had speculated on the negative impact water quality has had upon the tourism industry, but the Florida Realtors are the first organization to undertake a scientific study to quantify the problem. The purpose of the report is to examine how potential home buyers and sellers perceive the ambient water quality.

Home valuation based on sales from 2010 to 2013, chlorophyll-a readings, turbidity, and dissolved oxygen levels were some of the metrics used in the study. While short-term rentals may not be as badly impacted by algal blooms that clear up in a matter of weeks, long-term sales and investment are driven down by Lee County’s reputation for toxic, nasty, dangerous water events.

Kalea Bay Highrise Breaks Ground in Naples

Posted on May 26, 2015 by Wendi Wilkerson

HBW subscribers in Naples already know about the residential construction opportunities available in Kalea Bay, and anyone else who’s seeking home building job leads will surely want to check this out.

On May 18, construction began on the first of five residential high-rises to be built in Kalea Bay, a Soave Real Estate‘s resort-style gated community. This luxury community is the first major residential high-rise project to be developed in Southwest Florida since the real estate crash six years ago. VP of sales and marketing Inga Wilson says the real estate market is “bouncing back, prompting the return of not only high-rise construction but also hundreds of jobs.” Wilson goes on to state that Soave’s decision to start construction in mid-May “reflects [their] confidence in the Southwest Florida real estate market and commitment to those who purchased a residence in the high-rise in recent months.”

Located along Vanderbilt Drive in North Naples, Kalea Bay offers stunning views of the Gulf of Mexico. The site for the tower, a 20-story, 120 residence building, was cleared earlier so that sanitation, internet, and electric infrastructure could be installed. The tower is slated for completion in Spring 2017.

There are six floor plans available at Kalea Bay. The designs range from three to four bedrooms with three-and-a-half to four bathrooms, and 3,280 square feet under air. Total square footage for the units ranges from 3,755 to 3,921 square feet including atriums and balconies. All homes offer views of the Gulf, a private elevator leading into the residence, tech-ready wiring, oversized walk-in closets in the master suites, nine-foot ceilings, floor-to-ceiling windows and doors, fully equipped laundry rooms with washer/dryer sets, and wood floors throughout, and designatd under-building parking.

Each Kalea Bay high-rise building offers rooftop amenities including a fitness center, sky lounge, community meeting rooms, and pool. The community will feature a clubhouse with an internet cafe, three pools, a pool deck bar, a six-court lighted tennis pavilion, 24 guest suites, and an indoor/outdoor restaurant/snack bar overlooking a large lake.

The on-site sales center for Kalea Bay is located an 13910 Old Coast Road, off of Vanderbilt Drive. Asking prices being at $1.3 million and run to 2.6 million. To learn more about this development, please visit kaleabay.com

First-Time Buyers Slowly Returning to Housing Market

Posted on May 25, 2015 by Wendi Wilkerson

Although they aren’t totally back in the game yet, first-time buyers are claiming a larger share of the housing market. Builders, realtors, and market analysts at last week’s Homebuilding & Building Products Conference in New York commented on the uptick in new buyer activity nationwide. Although first-time buyers aren’t yet fully in the game, they are certainly stepping off the bench and onto the field.

This is welcome news. Economists have long cited the return of first-time buyers as a necessary precursor to economic recovery. The 437,000 new homes sold last year totaled only 58.6 percent of the annual average since 2000. The slow return of first-time buyers after nearly a decade of dormancy will boost home construction volume and market revenues. Executives from Meritage and Ryland offered key insights about this trend.

Volume builder Meritage announced plans to build starter homes in the low 200,000’s to cater to this emerging demographic. Although they typically cater to high-end buyers, hey have clearly taken notice of D.R. Horton’s wildly successful Express line of entry-level homes. Steven Hilton, Chief Executive with Meritage, told conference goes last week that, “We do see this as an expanding market,” adding that, “we saw strong demand in that segment in the last quarter and even more so over the last two months.” Meritage is absolutely not abandoning its higher-end upgrade buyer, but rather fostering long-term relationships with first-time buyers who will eventually also buy their upgrade homes from Meritage.

Ryland Group CEO Larry Nicholson echoed Hilton’s sentiment, “We hear from the field that the entry-level buyer is back out trying to figure out what they have to do to buy a house.” Nicholson says that new buyers “realize that money isn’t going to get any cheaper, that pricing is not going to get any cheaper. And they’re comfortable that their job situation is stable.” Upon review of the 7,677 homes they sold last year, Ryland projects that entry-level buyers in the coming year will account for 40 percent of Ryland’s total home sales. Entry-level buyers currently account for 33 percent of Ryland’s sales.

First-time buyer re-entry to the market has been hampered by several factors, resulting in a gradual trickle of would-be homeowners. While wages and employment rates have risen of late, the increase is still too recent and insubstantial to bankroll a mortgage. Crippling levels of student debt averaging $27,000 only make the issue more challenging. Home prices are still too still for new buyers to swing the 10 percent to 20 percent down payment on a new home. Mortgage lending criteria are still pretty stiff for first time buyers challenged by limited credit histories, even as the median home price hit an all-time high of $302,700. The good news is that the percentage of new home buyers will account for 18% of new home sales this year, an increase of 2% over last year.

New Home Construction Builds U.S. Economy

Posted on May 22, 2015 by Wendi Wilkerson

If the April housing stats are any indicator (and they are), America’s home building industry has rebounded from an abysmal winter season. New home starts came at the fastest pace in seven years, and the ramped-up construction is boosting materials sales at Lowe’s and Home Depot. Experts agree that the numbers indicate an accelerating American economy, which is a welcome change from the economy’s shrinkage in early 2015.

As Josh Boak of the AP writes, “the rate of approved building permits — a harbinger of future construction — rose a solid 10 percent from March to April.” According to government reports, April saw a 20.2 percent spike in residential construction, bringing the seasonally adjusted annual pace to 1.14 million. Single- and multi-family building starts rose substantially in the Northeast, Midwest, and West, and the single-family sector showing increases in the South as well. The Northeast saw the heaviest gains, with an 86 percent jump in the pace of construction over January, February, and March.

In areas that had milder winter weather, the construction of single-family homes has steadily risen since January, besting the numbers from winter 2013.Now that the snowstorms and freezing temperatures which delayed home construction are finally past, the strong pent-up demand for new construction has been driving the housing starts.

The rise clearly reflects an increase in buyer demand and consumer confidence, or as TD Bank Senior Economist Michael Dolega says, “If you’re willing to buy a house, that speaks volumes about your confidence, job prospects and economic fortunes going forward.”

This confidence is showing more strongly in the real estate sector than in any other market. While hiring has solidly increased, overall economic growth has been slow. 223,000 jobs were added in April, which lowered the employment rate to 5.4 percent. Yet the economic growth that should be happening with the increase in employment hasn’t really happened in any sector other than housing. Tight supply has kept new home sales relatively low for the market conditions. The national inventory of homes sits at about 4.6 months’ worth, considerably lower than the 6 month inventory that economists say indicates a healthy market. April’s strong housing starts have eased concerns about the national housing supply.

Home supply stores have cashed in on the real estate boom Households worth over $200,000 have seen an increase in property values, which encouraged them to buy more big-ticket items like grills, riding lawnmowers, water heaters, and solar panels. Home Depot CFO Carol Tome cited company earnings

of $1.58 billion, or $1.21 per share, for the past three months. This is a marked improvement over last year’s earnings of $1.38 billion at $1 dollar per share.

KB Home Building Anti-Drought Houses

Posted on May 21, 2015 by Wendi Wilkerson

KB Home residences fight the drought with a Nexus eWater system. Photo Courtesy of Nexus eWater.

While opinions on the causes are diverse and divisive, there is little doubt that climate irregularity has left drought-ridden communities all over the U.S. high and dry. Because the private water industry’s response has been to mobilize for a hike in water fees, many homeowners are seeking ways to substantially rework their water conservation and usage. In its latest partnership with Australia’s Nexus eWater firm, KB Home is the first volume builder to create substantial solutions to this problem.

Beyond merely conserving water with better fixtures and ENERGY STAR appliances, these new homes will recycle 2/3 of the water that they use. The Nexus system will draw in a home’s soapy water from the shower, sink, dishwasher, and laundry into a deep-cleaning system. The filtered gray water then exits the system to be used for flushing the toilet and irrigating lawns and gardens.

Although it isn’t suitable for drinking or washing, the gray water will take an enormous chunk out of a home’s water usage and utility bills. The system is easy to maintain and can be accessed through two circular manhole-like covers on the home’s exterior.

Ralph Petroff, chairman of Nexus eWater, says of their partnership with KB Home that “in five years‘ time, every new home will have a water recycler in it.” The cost to install the Nexus eWater system is just under $10,000 per home, and the prices are expected to decrease as more builders buy in and include the technology in their residential projects.

Petroff even thinks that the system will have a greater impact than solar panels, because “there is no alternative to water. That’s what Californians are discovering every day.”

KB Home, based in California, bought into the technology a while back and has recently announced that it will be a standard feature of 50 homes in a new San Diego development that is currently under construction. KB Home plans to demonstrate the system as a major feature in the model homes it is building in Sacramento and Lancaster.

Tyler Prepares for a Building Boom

Posted on May 19, 2015 by Wendi Wilkerson

Construction professionals seeking home building job leads should check out HBW’s building permit reports for the DFW metroplex and surrounding counties. According to a recent report by the Smith County Appraisal District, the market for newly-built homes in Tyler and Smith counties is red-hot. Demand is on the rise—especially for high-end homes—but housing inventory is dwindling, creating a tremendous opportunity for builders in East Texas.

Realtor Amy Montayne of Montayne Team says that, “there are just so many people moving to Tyler, migrating here from other states and big cities. It’s exciting, but we’re working ourselves to death. It’s a very, very competitive market.” The seller’s market here is “getting crazy” as Montanye puts it.

Homes in Tyler and Smith counties are snapped up almost as soon as they hit the market. Length of time on the market is one of the key real estate market indicators, and it’s also a bellwether of an area’s economic situation. According to Drew Dunklin, analyist for the Appraisal District, “The [current] median days on market is the lowest I can find in the last 20 years or so, down to 42 days,” which is less than half of the 10-year median average of 90 days, “and supply is down to a record low, where it was in 2006-2007.”

The Tyler market currently sits as 97 to 98 percent sales-to-asking price, which is remarkable considering that it’s areas like Dallas and San Francisco that buyers are “seeing well over 100 percent of asking price. We don’t see that as of yet,” says Dunklin, Currently, builders are just barely keeping the housing stock supply level high enough to meet the demand. A normal, healthy inventory for a new home is five to six months, and Tyler’s inventory now sits as 5.3 months. The incredible demand hasn’t resulted in outrageously inflated asking prices—yet—but Tyler is headed out of the Recession.

New home construction is approaching historic levels. The construction peak for Smith County, occurring 2005 & 2006, saw 1,000 homes built each year. 2014 saw 800 new homes built, and more than 1,000 have been permitted for 2015.

Current market trends indicate that high-end homes—anything over $300,000—are selling incredibly well in Tyler.Historically, the high-end house market has been somewhat cautious in Smith County, but with an improved economy, “those individuals ready to move up to those homes are in a financial situation to do so,” says Dunklin, “there’s more confidence in the market and in the economy.”

Builders well be glad to note that the demand for high-end homes is due to increase over the next year. Existing subdivisions are almost entirely built-out, and while there are several lake lots left, Dunklin explains that there hasn’t been “a lot of new subdivisions being platted in that prime price range. There’s a lot of space out there for expansion, but nobody is doing it right now.”

The increase in employment opportunities indicates that demand for entry-level homes will also grow. But as the city has always experienced a shortage in entry-level homes, this trend is expected to continue. The average new home construction price is $238,000, but the entry-level homes have recently been selling for well over $100 per square foot, which the report notes as a historic high for Smith county.

Orlando’s Sawgrass Pointe Celebrates Grand Opening

Posted on May 18, 2015 by Wendi Wilkerson

HBW subscribers in the Orlando area welcome the grand opening of KB Home’s new Sawgrass Pointe development. Located off of I-4, SR417 and SR 528, the community is convenient to the area’s choice shopping, employment, and recreation destinations. The lots in Sawgrass Pointe are projected to sell rapidly, and builders seeking residential construction job leads should check out HBW’s building permit reports to learn more about the opportunities in Sawgrass Pointe.

Home buyers can customize any of the ten one-and two-story floor plans featured in Sawgrass Pointe, knowing that they are minutes from the distribution centers, business parks and other major employers as well as the Orlando International Airport. Downtown Orlando is only a 10-minute drive from Sawgrass Pointe. Of interest to retired home buyers is the development’s proximity to The Burnham Biomedical Institute, Nemours Children’s hospital, the University of Central Florida Medical School, and the Orlando VA Hospital.

More than 180 one- and two-story homes ranging from 18,99 to 4,000 square feet will be available, with home prices beginning in the mid-$200,000s. The most spacious of the ome plans includes six bedrooms and four bathrooms. Sawgrass Pointe’s large home sites include views of the community’s landscaped pond or the wooded conservation area in which the development is located. The community also plans to feature a pool with a pavilion and a cabana, and playground. In keeping with KB Home’s high standards, each property in Sawgrass Pointe will be ENERGY STAR® certified, so residents can expect lower utility bills and a smaller ecological footprint.

HBW proudly serves builders in Alabama, Georgia, Texas, Florida, and Oklahoma. In addition to our Building Trend Activity for Residential Construction Reports, HBW can create a number of custom reports for any need you might have. We also offer exclusive White Paper Reports to help you market your business. White papers start by giving an overview of the trends in your area and then advice on how to turn your weekly building permit information subscription into successful business leads. To show you how we can help your business succeed, HBW is glad to provide you with complementary building data report or one of our specialized White Paper Reports. Contact us today and start making your business more profitable!