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Townhome sales defy slump
By BILL COATS
Published June 15, 2007

NEW TAMPA - Scott and Susan McDonald wanted a new house, but couldn't afford one, not in northern Virginia.

Bruce and Stephanie Maatta Smith wanted a new house in New Tampa, priced under $250, 000. With that budget, "We definitely could have gotten a house, but not in this area, " said Bruce Smith.

So the Smiths and the McDonalds - and more than 1, 000 other people this year - did the same thing. They bought new townhouses in Hillsborough County.

Their purchases drive a trend that runs counter to the broader pattern of local housing.

Sales of condos and free-standing homes, which mushroomed between 2003 and 2005, have plunged to prebubble levels. But sales of townhouses have marched onward. Builders in Hillsborough sold an average of 199 townhouses a month last year and 224 through April of this year, more than in any boom year, according to Rose Residential Reports, a market reporting service for the home-building industry.

"Three to five years ago, it was really hard to find townhomes, " said Brad Monroe, a Tampa Palms real estate broker and past president of the Greater Tampa Association of Realtors. "They've really gotten to be a lot more prevalent in the last few years."

Townhouses may have been rare around Tampa, but they aren't a new style of housing.

"I remember them building townhomes in Northdale in 1979, " said Marvin Rose, publisher of Rose Residential Reports.

"We've built townhouses for eight to 10 years in Tampa, " said David Seidenberg, owner of Bayfair Properties, which has developed them in Tampa Palms and Grand Hampton. "More recently, the big boys have started doing it. That's why the numbers are so much higher."

Scott Campbell, the Tampa Bay president of Pulte Homes, estimated townhouses have risen to at least 40 percent of Pulte's local construction.

"We have seen some of our major competitors move in that direction, " Campbell said.

Pulte sells townhouses in south Carrollwood and Riverview. Lennar Homes markets them in Arbor Greene and Seminole Heights.

"They just realized this market was underserved, " Seidenberg said.

Filling a gap

Townhouses traditionally have been an urban concept, and Rose contends most still are developed within a few miles of a shopping mall or downtown. But they're also becoming a feature of many master-planned mixed developments going up in former pastures.

In February, the Smiths became the third household to move into Stone Creek, near the Hillsborough-Pasco county line east of Live Oak Preserve. After living in a series of apartments, the Smiths are nestled in a cluster of cypress swamps and nearly surrounded by wilderness, for the time being.

"You could actually hear the birds, " marveled Stephanie Smith.

The rise in popularity of townhouses is caused partly by the rise in price of houses. An explosion of investor demand three years ago jacked home prices out of reach for many would-be buyers.

Townhouses and condominiums filled the gap.

Pulte's Campbell said townhouses were aimed at first-time home buyers who couldn't afford houses. And they proved more popular than condominiums, with no one living above or below.

"A lot of the lower-end housing is being replaced by townhomes, " said Monroe. "You have lower land costs, and you can bring the product in at a lower cost."

"You can't find a single-family home here for much under $225, 000, " said Rose. "That's where you find the townhouses."

The condo market, meanwhile, became glutted with apartments converted into condos. The new home market became glutted when investors quit buying.

If there's a townhouse glut, it's smaller. But there are signs. Mobley Homes recently advertised a "total appliance package" plus $8, 000 in closing costs at Stone Creek.

Eliane Balleza, a real estate agent based in New Tampa, said some townhouse developers have slashed prices in response to buyer offers.

"They're taking $25, 000 or $20, 000 off the base price, " she said.

Price, convenience

The Smiths contracted in April of last year to buy their townhouse at Stone Creek for $241, 000. By then, the housing market had been cooling for half a year. Mobley's incentives included miniblinds, a stove, a dishwasher - $10, 000 in upgrades.

Yet bargains weren't the Smiths' prime motivator. It was the convenience of having all exterior maintenance and insurance covered under the homeowner fees.

Price was key for the McDonalds, who bought a townhouse several doors away from the Smiths. They had moved to Tampa in September 2005, seeking lower housing prices than their prior residence of Fairfax, Va., where a one-bedroom condo cost $400, 000. They rented at Harbour Island before contracting in February 2006 for the townhouse at Stone Creek.

That close to the boom, developers were offering few incentives. The McDonalds paid $237, 700, with surround-sound wiring and kitchen upgrades.

"It may be expensive, " said Scott McDonald, a 28-year-old restaurant manager. "But my friends in northern Virginia just bought a townhouse up there, and they paid $500, 000."

Bill Coats can be reached at 813 269-5309 or [email protected].

http://www.sptimes.com/2007/06/15/Northoftampa/Townhome_sales_defy_s.shtml
 
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