Area new home sales spiking as resale inventory shrinks


A house under construction in the Savannah Station subdivision in Alachua on Friday.

Doug Finger/The Gainesville Sun
Published: Friday, November 2, 2012 at 5:57 p.m.
Last Modified: Friday, November 2, 2012 at 7:49 p.m.

Tom and Melanie Yonge couldn't find the perfect home for their family of four two years ago after moving to Gainesville from Vero Beach for his environmental consulting job — so they decided to build one.

On Wednesday, they moved into their new two-story, four-bedroom, 4-bath home in Town of Tioga in Jonesville.

"It doesn't seem like there's a ton of inventory," Tom Yonge said. "Really good houses don't stay on the market very long."

That might seem counterintuitive in a housing market that has been recovering in fits and starts, but area home builders say that as the inventory of resales shrinks, business for new homes is showing signs of what Tioga developer Luis Diaz called "green shoots."

Builders and developers are starting new developments or new phases in existing developments in anticipation of continued momentum, while sales that had stopped or slowed to a painful crawl in other developments are picking up.

After dropping every year since 2005, building permits for new homes in the Gainesville Metropolitan Statistical Area were up 27 percent over 2011 for the first nine months of the year. Housing starts are still just a fraction of what they were in 2005, when builders pulled permits on 2,395 new homes before dropping to 464 last year.

"We don't foresee any comeback to the crazy growth we had in 2005 and '06. We're just kind of seeing a return to the thing that Gainesville does best, which is normal, modest growth," Diaz said.

Builders say the improvement for new homes correlates with the market for resales. Sales of existing homes were up 9 percent for the first nine months of the year, while the inventory of listings on the market was down 19 percent.

Todd Louis, vice president of Tommy Williams Homes, said the declining inventory is the result of both more sales and people not putting their homes on the market as fast as they were during the peak years, when investors were driving the market.

"What (buyers are) finding is if you're not looking for a short sale but you want a decent home, the pickings are slim," he said.

After selling about 20 homes last year, Louis said Tommy Williams has sold 30 so far this year.

"We literally sold out of homes this year," he said. "We always try to have homes available for people to move into, and we literally could not build them fast enough."

The company is one of the builders in the Longleaf subdivision off Southwest Archer Road that is about to open the last phase of 90 homes and is preparing to start a 400-plus home development called Finley Woods on the north side of Williston Road around Southwest 62nd Avenue.

Diaz said sales in Town of Tioga slowed from about 40 a year to eight last year. While on pace to sell 12 homes this year, the development decided to proceed with phase 14, which has been on hold for more than two years.

Tioga has been helped by people who want to move there being able to sell their previous homes, Diaz said.

Phases 12 and 13 are down to 15 remaining lots available out of 32.

Phase 14 will consist of 16 brownstone-style large, attached townhomes in four groups of four, plus four small single-family lots.

Fletcher Family Companies in partnership with EG Gonzalez Custom Homes opened Savannah Station, a 52-lot development in Alachua, two months ago and has sold two homes.

"I remember when you couldn't sell two homes a year," Blake Fletcher said.

The development caters to first-time buyers, with U.S. Department of Agriculture loans available for no money down to qualified buyers in rural areas, with prices ranging from $128,000 to $200,000.

Even at lower price points, Fletcher said the partners will make more money than having their cash sitting on the sidelines collecting low interest.

"We felt like we could get to a niche in the market," he said.

Fletcher said their outlook is positive because of a combination of people who have been renting for a while who want to buy plus some stability in home prices that are no longer dropping 15 percent to 20 percent a year.

"There's a lot of built-up demand," he said.

Higher-priced homes also are starting to sell as second- and third-time buyers return to the market, Fletcher said. Fletcher Park, with prices from $250,000 to $450,000, opened in 2006 off Parker Road in Jonesville.

"We mistimed the market," he said. "We went an entire year without selling a home."

After selling seven homes in the past 12 months, the development is down to 19 available lots out of 58.

Yonge said his purchase in Tioga had more to do with personal than economic reasons, but the timing was right with a loan at 3.75 percent interest.

"Certainly now is the time to buy a house," he said. "Rates are at an all-time low. The market itself is probably going to do nothing but go up from here. I'm pretty optimistic about the economy and the housing market in general."

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