Many markets across the country are in full retreat, especially
where investors flipping houses drove annual price increases to
unsustainable levels. With no one sure what a fair price looks like,
potential buyers are sitting on their wallets as excess inventory
stagnates — and some builders exacerbate the problem with massive
discounting. It's happening even in markets where the local economy
is booming.
If you're wondering what kind of product will finally entice
buyers back into sales centers in such areas, here's our pick: New Urban Communities'
Botanica, an infill masterpiece only blocks from the Intracoastal
Waterway in Jupiter, Fla., north of West Palm Beach.
Lots in Botanica, an infill
development in Jupiter, Fla. are 40 feet by 50 feet and cost
about $120 a square foot to
build. |
Risky
Land
The space is part of a mixed-use development created on 143 acres
of former MacArthur Foundation land the firm acquired in 2001 from
WCI Communities. "It was zoned industrial," NUC partner Tim
Hernandez recalls. "Only about 60 acres was buildable, and it had
railroad tracks on one side and power lines running down the
middle.
"WCI didn't want it, but they wouldn't sell it to us subject to
approval. The risk of changing the land use and zoning was all on
us," Hernandez says.
New Urban took that risk, then nursed the parcel through two
years of entitlements, including environmental permitting through
the Army Corps of Engineers and South Florida Water Management
District. The zoning for the full site now allows 540 units, plus
commercial space. New Urban sold off most of the land, including a
cul-de-sac of large lots jutting into one of the lakes on the site,
but Hernandez and partner Kevin Rickard hung onto 20 acres for the
compact neighborhood of 123 rear-loaded, detached courtyard
homes.
"We wanted to do something different from everybody else," says
Hernandez. "Rear-loaded courtyard homes with optional guest quarters
above the garage at the back of each lot fills that bill." For a
crowning touch, the partners decided to shun South Florida's
ever-present Mediterranean architecture for what Hernandez calls
'Anglo Caribbean' — a mix of brightly colored stucco and
clapboard-sided two-story houses, some with metal roofs. The second
stories, like the first, have concrete block walls.
Why It's A Winner
When housing markets contract, they do it geographically as well
as figuratively. Subdivisions of tract houses far out of town are in
trouble in many markets today. When the buyers come back, it will be
for unique value they can't get in the resale market. Location leads
the list of attributes. Striking architecture and a
pedestrian-friendly land plan with urban attractions within walking
distance are also near the top.
As their company's name implies, Hernandez and Rickard are
dedicated new urbanists. With the town of Jupiter, the firm
negotiated rentable auxiliary dwelling units above 28 of the 123
garages. The rest can have what NUC now calls "executive retreats"—
guest quarters. The difference is subtle. The rentable form has a
range, rather than a microwave oven, and a balcony, so there's
slightly less interior space. "The town requires a certain
percentage of useable outdoor space in relation to indoor for rental
properties," Hernandez says.
Courtyard homes have become a popular product in Florida,
especially for empty-nesters who want to do lots of entertaining. An
L-shaped floor plan surrounding a pool creates a dynamite party
house. But most Florida courtyard homes have the garage at the front
(often flanked by a detached guest house). Visitors enter through a
gate, and the front door is actually inside the courtyard. Houses
have little curb appeal when the street scene is a sea of garages
and the blank walls of guest houses facing internal courtyards.
Botanica's lots are 40- to 50-feet wide. "With 5-foot side setbacks,
that leaves 30 feet of width for half of our houses. If 20 feet of
the width was taken up by the garage, how bad would that be?"
Interior designer Michelle
Palmer-Reich of The Interiors Gruop in Boca Raton, Fla., uses
an eclectic, luxurious mix of furnishings in Botanica models
to cater to diverse buyers.
Photography: Scott
Smith |
Instead, with the garage at the back, the front of the home can
be devoted to traditional spaces buffered from the sidewalk and
street by porches and balconies. The entertainment space around the
pool is totally private, shielded by the house and garage on three
sides, with a privacy fence filling the gap.
Shown here is the Cayman model, the largest floor plan at 3,639
square feet and decked out in striking orange stucco and a metal
roof. It has a 17- by 5-foot covered porch off the breakfast nook
that would normally be a $15,000 option, but it's required by
Jupiter on corner-lot houses where that side of the house faces a
street.
Only the family room and breakfast nook face the pool, while the
traditional living room and a guest bedroom face the street
downstairs. The master suite and three more bedrooms sit upstairs,
and the only way to the executive retreat above the garage is
through exterior stairs off the courtyard. It has a living room,
bedroom, full bath and kitchenette (without range).
Halfway Home
Botanica's pre-sales began in the spring of 2004 with eight floor
plans ranging from 1,747 to 3,639 square feet and base-priced from
$369,990 to $559,990. By the time two furnished models opened in May
2005, sales were booming and prices ranged $569,990 to $764,990.
Sales agent Linda DeFrancis says it stayed that way until late last
spring, long after the rest of South Florida's housing market
crashed. "We were the last to feel it, and I think we'll be the
first to recover," she says, but admits she spends her days now
trying to hold onto the 62 sales Botanica still has.
DeFrancis believes as much as 30 percent of those buyers were
investors. "We tried to screen them out, but they lied to us," she
says, admitting that she'll have to sell against that competition
when the market comes back. Rickard believes that may happen as soon
as this winter's selling season. "Our traffic doubled in August,
from July, and that was just as we were heading into hurricane
season. Don't underestimate the impact that had this year. We had
three hurricanes hit this coast in the last two years; a lot of
people were waiting to see if it was going to be like that every
year from now on," he says.
New Urban has backed away only slightly from peak pricing. The
range is now $569,990 to $689,990 for six floor plans from 2,097 to
3,639 square feet. A small one-story plan and one other were
eliminated from the mix.
"Lowering prices is not the answer," Rickard maintains. "As the
master developer, our land basis in these houses is very low. We
sold serviced lots to our home building operation for $65,000 to
$75,000 apiece. We could win a price war, if it came to that. But we
don't need to fire-sale this product. The location is too strong for
that. When the market comes back, we'll be the first to know
it."
New Urban has two spec homes — otherwise, no standing inventory.
The firm builds the Botanica homes for hard costs averaging $120 a
square foot.
Botanica packs 123 rear-loaded homes
- ranging from 2,097 to 3,639 square feet - onto 20 acres in
the heart of Jupiter, Fla., blocks from the Intracoastal
Waterway. The location attracts a mix of
buyers. |
© 2006, Reed Business Information, a division of Reed
Elsevier Inc. All Rights Reserved.
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