The trend in waterfront neighborhoods: Investors are replacing modest homes built in the 1960s and '70s with more expensive stock.
By ALEX LEARY
Published June 14, 2004
PORT RICHEY - In January 1996, Phil Abts left his hometown of Birmingham, Ala., and headed to Florida in search of "beaches, bikinis and a new life."
His quest began in Clearwater, where sand and girls abound. Finding a place to live was more challenging. Waterfront homes were selling for $300,000 to $3-million.
"There was no way I could afford waterfront property there," Abts said. "So I kept driving north, looking in Palm Harbor and Tarpon Springs. But the prices were still high."
The corporate insurance agent had never heard of Port Richey but went there on the third day of his increasingly frustrating trip. He ate lunch at Hooters then drove down the block to see a one-story, two-bedroom home off Old Post Road.
At $79,000, it was priced right and backed up to a canal. Abts, 39, bought the house and two years ago demolished most of it. With the help of a federal flood mitigation grant, he built a sprawling two-story, 5,200-square-foot home. Today Abts' property is assessed at more than three times the purchase price.
His story reflects a trend in Port Richey's waterfront neighborhoods, scattered among canals, the Pithlachascotee River, Miller's Bayou and the Gulf of Mexico. Enclaves of modest, single-story retirees' homes built in the 1960s and '70s are undergoing a transition to a more expensive stock.
The new owners are generally younger and wealthier, though not able to swing a waterfront home in Pinellas County or other high-priced areas. They are snatching up what vacant lots remain, buying existing homes and renovating them or, like Abts, replacing them with new structures.
Over a five-year period, median home values increased 68 percent in Port Richey. In 1998, the median sales price was just under $60,000. In 2003, the median price was $100,000, according to Times research.
Numbers for waterfront property are more stark. Real estate experts estimate that a prime waterfront home worth about $200,000 five years ago could sell for up to $500,000 now. Condominiums in the gated Sand Pebble community that cost $90,000 three years ago now sell for $200,000.
"It's such beautiful waterfront and more and more people are discovering that," said Dewey Mitchell, a prominent Pasco real estate broker.
Developers have not overlooked the area, either:
More than 40 single-family homes are planned on 40 acres off Ebbtide Lane, near American Marina. City officials said they would sell for up to $750,000 apiece.
Doug Markham is developing seven, million-dollar homes on the Gulf of Mexico, past the Sand Pebble gated community. Lots alone are selling for $450,000 to $650,000. Markham also has an 18-home project under way adjacent to Werner Boyce Salt Springs Park.
"There's been a boom for four years or so, at least," said former City Council member Dale Massad, who lives on Miller's Bayou. "We've gone from Podunk to on the map."
The change is evident from Abts' front porch. Across the street, two new homes have gone up in the past year and the lot in front of him is under construction. The owner, a young real estate investor named Jason Rehkop, is building a 4,100-square-foot stilt home and plans to sell it for about $300,000.
"Port Richey has everything," said Rehkop, 31. "It's within walking distance to the mall, Wal-Mart, parks, the casino boat and Hooters. The city is one of those secrets, but I don't think it will be for long. It's one of those cities that got behind, but now it's catching up."
Commuters from Tampa and St. Petersburg are among the new faces. Steven Hardee, 48, a technician at CarMax in Tampa, said he left the city to escape the congestion. "I like the small town feel," he said of Port Richey.
Two years ago, Hardee paid $50,000 for a one-eighth acre vacant lot on Bluepoint Drive, across from Abts. "At first I thought I was paying too much. Now I'm glad I got it. The prices keep going up." A similar lot on a canal goes for about $75,000. Hardee recently completed building a three-story, Key West style home on the property.
Some homeowners want to cash in on the hot real estate market.
John Rodanhisler bought a typical single-story Port Richey home on Miller's Bayou in 1994 for $110,000. The home was badly damaged in the 1993 no-name storm and flooded again in 1996 and 1999.
Like Abts, he obtained a flood mitigation grant, and began building a new house two years ago. Nearly finished, it is a spiring stone-faced, three-story home neatly tucked at the end of the bayou. Rodanhisler plans to sell it for more than $1-million.
"We've already talked to a few real estate people and according to them we're not out of line what we're going to ask," said Rodanhisler, 60, a former General Motors electrician. "I wish I bought other property here 10 or 15 years ago."
Dave Kyle is selling his octagon-shaped home on Quist Drive for $398,000. It is assessed for $173,000, but Kyle has no worries about getting the asking price.
"I thought about keeping it because the price is only going to go up," said Kyle, who is moving to a condominium in Gulf Harbors in New Port Richey.
Kyle, 63, built the home in 1991. "Back then," he said, "there were Florida cracker houses as far as you could see. Slowly but surely they are being weeded out."
A house on the canal behind him, he said, is worth close to $700,000, and two other homes nearby have risen from the foundation of smaller dwellings.
Indeed, while the city's vacant lots are disappearing, homeowners and real estate experts say the building trend is likely to continue because wealthy people can afford to buy small existing homes and replace them.
As Mitchell explained, a person looking at a $1-million waterfront home in Tarpon Springs could come to Port Richey, buy a house for $250,000, tear it down and build a new one - and still come out ahead.
Of course, rising property values also lead to higher tax bills. Some Port Richey residents say the tax burden is already too high and are using that as a justification for a petition to dissolve the municipality and merge with unincorporated Pasco County. One of the backers, radiologist Steve Johnston, says his $1-million home on the gulf generates a tax bill of $26,000 - $6,000 of which goes to the city.
But the desirability of the waterfront will continue to be a draw, say real estate experts, and city leaders seem to recognize that.
In February, the City Council appropriated $70,000 for canal dredging permits. Making the canals deeper would further boost existing property values and open the real estate market to people with larger boats, officials say.
"The more usable access for water you have, the more value you are going to have," Mitchell said.
- Alex Leary covers the city of Port Richey. He can be reached in west Pasco at 869-6247, or toll-free at 1-800-333-7505, ext. 6247. His e-mail address is leary@sptimes.com
