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Off/beat

Seller's market pushes this family to stay put

By JIM THORNER
Published March 13, 2005

If this is how it feels to ride a rocket, please show me the way to the escape hatch. I want off the Saturn Express.

I'm talking about buying a home in the current souped up seller's market.

Before you even notice the "For Sale" sign out front, there's another couple marching out the front door waving a sales contract.

And they paid full price. Or higher.

I got a taste of buyer's desperation on a tour of Pasco County builders. My family has considered building a new house. With three kids we've simply outgrown the old one.

But within weeks of signing on the dotted line, we did what few others seem to have done during the housing boom. We walked away. And happily so.

In any other transaction - buying a pair of pants, installing tiles in the kitchen, picking out a car - we're cautious consumers.

We seek out stations selling gas for a couple pennies cheaper per gallon.

But in the biggest purchase of our lives - a quarter million bucks for a new house - we seemed to go all mushy and weak.

Just show me where to sign, how much the mortgage costs each month, and when we can move in. Hear no evil, see no evil.

But as we contemplated the hefty down payment and $1,200-per-month thereafter, reality set in.

A few years ago, builders were ready to play "Let's Make a Deal." They'd toss in a washer and dryer. They'd knock $5,000 off the price of the lot.

This year? Forget it. It's Boomsville, baby.

Tampa Bay area homes appreciated 17 percent in 2004, according to the federal government. Some people wait six months for a lot. Heck, they even used a lottery, church raffle style, to select buyers at one Land O'Lakes development.

Sellers are dictating the terms. But in our case the terms seemed so disadvantageous, we felt we had to bail:

The builders asked that we sell our old house months before the new home was completed, thereby forfeiting any final property appreciation. It had to be that way since we planned to use the gain from the old house to finance the new.

When I griped about moving my family into an apartment for several months, the saleswoman chirped: "That's just the way things are if you want to build a house in Florida."

It often doesn't pay to be a pioneer. The new neighborhood would have no amenities. It would sit 10 miles from the nearest library. Though required to set aside patches of grass as so-called parks, the builder won't install playground equipment. My 2-year-old would have never forgiven me.

Artificial shortages are no fun. The builder plans to "release" only 6 to 8 lots a month. We lined up early and were among the first bunch of lot seekers. Then we noted the families before us in line. At least three (including one lady who wanted to buy 15 lots!) were investors who planned to dump the houses before move-in day. Not only would we be among the first families, but our neighbors might have been "For Sale or Rent" signs.

Would you buy a car without seeing the sticker price? Me neither. The builder wouldn't give us a price of the house we wanted. Not even a range. Again, I understand the company's caution considering prices rise almost monthly. But that doesn't mean I have to buy one.

We plan to stay put and let things cool off. To tell you the truth, it's not much of a sacrifice. We live on one-fourth acre, double the size of the typical new home lot. Our citrus trees are mature, their blossoms aromatic this time of year.

We enjoy 12 tennis courts, a two-story clubhouse and a giant in-ground community pool. And they were built before the era of Community Development Districts, so the cost of maintaining them is low.

But some of the housing experts I interview suggest I'm a fool. They say prices will continue to skyrocket and I'll have to break the bank sooner or later.

Perhaps.

A friend of mine had that experience. She failed to leap at a house last fall and was stunned when the price rose $40,000 - about 27 percent - in the space of a couple months. She tried the patient approach, and look where it got her.

I don't think historically low mortgage rates will last. When rates approach the 7 percent threshold, home prices won't feel as cheap when sliced into monthly payments.

Builders of small homes who raise prices $50,000 over three months will get laughed off the block. Home prices will still rise in Florida, but more tolerably.

But that's just an educated guess. If my move-up model hits the half-million mark in a couple years, I may live in my cramped house a long, long time. At least the orange trees will smell sweet.

[Last modified March 13, 2005, 00:23:15]