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Breakneck sales pace relaxes in Pasco

Though demand is no longer a slam-dunk, causing builders to use more incentives, prices aren't falling - they're rising.

By JAMES THORNER
Published October 29, 2005

Is the fiery Pasco County real estate market cooling? Some signs point to yes.

Builders in Wesley Chapel and Land O'Lakes are reporting more unsold homes, inventory that tended to move quickly last year but labors to find buyers this fall.

With homes starting to accumulate on lots, a couple of builders are offering bonuses of several thousand dollars to real estate agents who steer customers their way.

Other builders, who spurned investors during the housing boom earlier this year, are re-evaluating whether to drop the policy.

Morrison Homes, one of six builders in the newly opened Connerton on U.S. 41, has 11 inventory houses available for sale.

Last spring, KB Home, selling in Tierra Del Sol community on U.S. 41 in Land O'Lakes, rationed sales through competitive preconstruction waiting lists.

That pressure has eased. Though buyers have scooped up 102 homes in Tierra since March, five or six houses are available without the need to stand in line.

It's the same with Lennar, the nation's third-biggest home builder. It has five inventory houses for sale in its Bridgewater development at Curley and Wells roads in Wesley Chapel.

"Before, they were drawing lotteries to choose who could buy houses," said Jorene Schretzmeijer, manager at Prudential Tropical Realty's Land O'Lakes office. "Those days are over."

Though other signs point to a market correction, including a report last week that Tampa Bay area housing is overvalued an average of 23 percent, it's not wise to assume prices will fall.

Prices have ballooned this year, a sure sign builders need not fear having their BMWs repossessed any time soon.

KB Home's models in Tierra Del Sol are a case in point. In April, the 2,650-square-foot four-bedroom model listed for about $230,000.

Last week that model was listed for $295,000. That's a 28 percent appreciation in six months.

The biggest reason for high prices is the shortage of lots relative to demand, said Kevin Robles, president of the Pasco Building Association.

In his capacity as vice president for McCar Homes, Robles said his company's up-and-coming projects near State Road 54 in Wesley Chapel are attracting a barrage of interest.

"If we quit getting inquiries, that's a bigger indication of a cooling of the marketplace," Robles said. "But our signs on the highway have drawn huge interest."

Pasco's housing permit totals dipped slightly earlier this year, but Robles blamed bureaucratic backlog in county government, not a softening customer interest.

Morrison and Lennar have offered $3,000 bonuses to agents who bring them paying customers and help them clear inventory. Schretzmeijer said builders were so confident of sales, they hadn't offered such bonuses for at least a year. No longer.

But Robles said it's typical of large national builders to offer incentives as the year draws to a close. Publicly traded companies such as Lennar have financial goals to meet.

-- A version of this story appeared in some regional editions of the St. Petersburg Times.

[Last modified October 28, 2005, 11:07:05]