Bay area home data cheer builders

The strength in new housing construction in 2000 offers hope that the region will not be hurt by the tough business climate.

By KYLE PARKS

© St. Petersburg Times, published February 8, 2001

Tampa Bay area home builders cranked out about 13,000 new homes last year, a performance that gives them confidence they'll weather the economy's slowdown.

In Hillsborough, Pinellas and Pasco counties, there were 10,599 closings on new homes in 2000 at an average price of $189,268, according to figures released Wednesday by Rose Residential Reports, a Tarpon Springs firm that tracks area construction.

Closings were up 10.6 percent from the previous year, while the average new home price rose 10.4 percent.

"In terms of dollar volume, it was another record year," said Marvin Rose, who runs Rose Residential Reports. "For the market to maintain the increases from 1999, which was so hot, is quite something."

And while some builders worry about predictions that job growth will slow this year across Florida, they say lower interest rates are bringing home buyers off the sidelines.

"We are still very bullish, very positive," said Marshall Gray, vice president of Ryland Homes' area division, which is building homes in seven bay area counties. "The lower rates have helped, and we feel we're positioned for another good year."

Still, one statistic worries some builders: the increase in prices. New home prices in Pinellas shot up 19.4 percent last year to $259,790, and with an average price around Tampa Bay nearing $200,000, many buyers are finding new homes out of reach.

"The price level is turning into a real problem for a lot of people," said Paul Thompson, executive vice president of the Florida Home Builders Association. "We're seeing some affordability problems among middle-income buyers."

Hillsborough County led the area's new home growth last year with 6,310 new home closings, up 15.8 percent. Pinellas had 1,644 closings, up 3.7 percent, while Pasco had 2,645 closings, up 3.9 percent.

Pinellas' new home growth is stunted by the lack of available land -- more developers in the county are tearing down old houses to make room for new ones -- while Pasco was following a year when it had staggering growth of 42 percent.

Many projects on the North Suncoast, including a number along the route of the new Suncoast Parkway, are in the planning stages. That helps explain the slower pace of growth in Hernando and Citrus counties.

In Hernando, permits for single-family homes dropped to 1,146 last year from 1,214 in 1999. In Citrus, 1,263 permits were issued last year, up from 1,096 in 1999.

Economists who study Florida predict a slowdown in job growth and home construction this year. For example, Orlando economist Hank Fishkind predicts job growth in the Tampa Bay area this year will be 25,667, 18 percent lower than a year ago, while housing starts will be 14,283, a drop of almost 30 percent.

"A number of areas around Tampa Bay are approaching build-out, and some of the surrounding areas are building their own retail centers, which hurts Tampa Bay's retail growth," said Stan Geberer, an associate with Fishkind & Associates.

But so far this year at least, area builders aren't seeing any evidence of a slowdown.

"One of our members just sold three speculative houses in seven days," said Rodney Fischer, executive director of the Contractors and Builders Association of Pinellas County. "There's still strong demand."

In fact, builders continue to complain that their biggest problem is lack of help, both in planning and building their houses.

"The labor shortage is such an issue," Fischer said. "We need more people coming up through the trades, learning skills, and that isn't happening enough. It's an aggravation that slows the process."

In Homosassa, builder Jay Jacoby says demand in 1999 was too much for architects, permitting agencies and contractors to keep up with. So some Citrus County houses planned for that year weren't permitted until 2000.

"When you have a pretty vast increase in the number of homes you have to build, you need more of those people and they aren't there," said Jacoby, who owns Sweetwater Homes. "Every part of the process slows down."

- Times staff writers Bridget Hall Grumet and Saundra Amrhein contributed to this report. Contact Kyle Parks at parks@sptimes.com or (813) 226-3405.

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