Karen Hogan looks our her bedroom window at the Intracoastal Waterway. Karen and her husband, Bill, bought their home for $295,000 three years ago. They just put it on the market for $717,000.
[Times photo: Kinfay Moroti]
A view from one of the two Belle Harbor towers under construction shows Clearwater Beach, right.
TREASURE ISLAND - The long nights sleeping on a day bed surrounded by a half-built house wrapped in plastic sheeting are finally paying off for Karen and Bill Hogan.
The Hogans and their two children lived in their Treasure Island house for seven months while it was being renovated. They paid $295,000 three years ago for the 1960s ranch home on the Isle of Capri and spent about $275,000 on improvements.
Last week they put their waterfront home on the market for $717,000, hoping to net $147,000, far more than they expected when they bought the place.
"Did I figure it was going to appreciate this much, this fast?" said Mrs. Hogan, 44. "Nope. I had no idea."
The Hogans are just one example of the land rush under way on the Pinellas beachfront.
How crazy is it? Consider what's happening at the Surf Motel on Treasure Island, not far from the Hogans' house.
Gail Byrne and Ken Brown bought the 1950s beachfront motel in October for $4-million. They plan to tear it down and build 30 condos. The condos hit the market in January and were gone in two weeks for prices ranging from $380,000 to $430,000.
Since then, four or five of the condos have sold again, at profits of as much as $100,000 each.
"Do I not feel stupid that we underpriced them?" Gail Byrne said. "After 20 years, you'd think you'd know what you were doing. It's changing so rapidly that I didn't have a clue that we underpriced them by $100,000."
It's not just beach property that's booming.
Since 1998, the median price of waterfront homes and condos in Pinellas has increased more than twice as fast as real estate off the water, a St. Petersburg Times analysis found. The prices are rising as much as 10 times faster than inflation.
The median price of waterfront single-family houses in Pinellas tops a half-million dollars. That's 136 percent more than in 1998. Waterfront condos have a median price of $270,000, up 106 percent since 1998.
To Paul Gibson, a Clearwater Beach Realtor, the prices are extraordinary but the forces driving them are not.
"It's a product that everyone wants, there's not much of it, and the demand goes up every year," Gibson said.
Byrne also plans condos to replace the old Ramada Inn on Treasure Island and is having no trouble selling them, for prices as high as $700,000. As soon as a unit near the Gulf sells, the next closest sells.
"It's almost like a frenzy," Byrne said. "It shocks me every day. Even what people are willing to pay, preconstruction. We're getting $500 a square foot. It baffles me what people are paying."
Gibson, who already has handled more than $16-million in beach sales this year, sold an $880,000 condo over the phone. His out-of-state buyer didn't see the unit until just before closing the deal. He worried that if he waited, he would miss it, Gibson said.
Gibson bought a condo at the Mandalay Beach Club in Clearwater for $500,000 two years ago. He is already selling it for more than twice as much.
His neighbors Walter and JoAnn Touchton tired of the expense and upkeep of their five-bedroom Belleair Beach home on a canal. They sold it for $750,000 last year and bought a condo in Mandalay Beach Club for $795,000.
A similar condo sold last week for $1.5-million. Walter Touchton said they aren't leaving.
"I don't want to go on vacation because I can't find a place that's prettier and nicer than where I live," he said. "There are very few people who live here who don't feel lucky to live here."
Just blocks away, at Belle Harbor, buyers camped out on the street for two weeks to buy the first units. With $125-million in condos in two towers, Belle Harbor had three of the original 200 left on Friday, weeks before the first owner will close. A condo on a lower level with little view started at $300,000. Penthouses with expansive vistas and 4,000 square feet went for $1.7-million.
Not far from Belle Harbor, Brightwater Drive in Clearwater Beach illustrates what can happen when demands and profits collide.
Five years ago, Brightwater was lined with more than a dozen mom-and-pop motels catering to repeat customers looking for bargains on the beach.
By the end of next year, all but a few will be gone.
The street is jammed with construction trucks. One by one, the motels are going for huge sums and being replaced with three-story, upscale townhomes and low-rise condos. Prices start around $700,000.
Roland Rogers, the developer transforming most of Brightwater, has seven projects under construction, four in planning and two more under contract.
He figures he has to move quickly. Within five years, Rogers said, all of the relatively cheap land will be gone and the costs for starting a project like the ones that line Brightwater will be prohibitive.
"Timing is everything," Rogers said, sitting in the model center for Brightwater Townhomes, a 10-unit development sporting wood floors, a private elevator in each unit and a rooftop view from the Intracoastal Waterway to the beach.
Amid all the Brightwater Drive construction, Stanley Paulach is just trying to hold on to his Blue Jay Motel for a few more years until his daughter graduates from high school.
Then he is cashing out.
"You wouldn't believe it," he said. "The offers come in every week. They want to buy the land. They don't want the building or the business."
Rooms at the Blue Jay go for $45 to $75 a night. Offers to buy the place are as high as $2.1-million.
Part of Paulach wants to stay. He has a good spot on the Intracoastal Waterway, just a short walk to the beach.
"We have a really good business," he said. "Why should we leave?"
But rising property taxes are squeezing already thin profits, and customer grumble when Paulach raises room rates even $10 a night.
Karen Hogan has a similar conflict. Rebuilding her house was hard, but she planned to make it home so she figured she could put up with it.
But the money is too good to pass up, so she is resigned to selling.
The Hogans' have a contract on a beachfront condo that has not been built yet.
